Is the Real Estate Market Worthy of Investment?

As anyone who keeps their fingers on the pulse of the British economy can testify, the real estate market is currently facing an extremely challenging time. Dominated by the nations’ capital London, it has faced an entire quarter of sluggish growth after nearly a year of expansion and considerable success. This is now set to reach a peak, with London’s so-called ‘super prime’ property market set to crash.

This is according to Market Oracle, which claims that an ongoing slumpin oil prices has been the primary trigger for falling real estate value in the capital. This has impacted on the level of high-end foreign investment, with the result that there is less money entering the market and driving growth. With this trend set to continue into 2015, the market may be primed to crash.

Is the Real Estate Market a Worthy Investment Opportunity?

With this in mind, it would be reasonable to assume that the real estate market should be avoided by investors at all costs. This is a false perception, however, as there are different aspects of the market and alternative grades of investment that offer various opportunities. Take the distinct commercial and residential markets, for example, as while the latter has prospered in the city the former has suffered in the wake of an external economic downturn. In addition to this, there are also differentiators that make a significant difference in terms of viability and returns.

Take the ‘buy-to-let’ market, for example, which is continuing to evolve in the wake of a continually evolving demand for rental properties. After the value of London real estate soared to unsustainable heights, many aspiring buyers were priced out of the market and forced to consider alternative options. More specifically, they enter the rental market and look to bide their time until property values become more obtainable. This has created an opportunity for private landlords to invest in properties and rent them out on long-term contracts, generating a recurring, monthly income in the process.

The Last Word

On a similar note, many landlords are now taking the proactive step of investing in affordable, larger properties and maximising the space to create multiple units. Essentially, you could purchase a five bedroom home in a less affluent part of the capital and remodel this slightly into single studio apartments. Ideal for the young professional and student markets, this will drive a high level of demand and interest for your properties.

For further information, click here to unlock the London real estate market and compare pricing in specific regions. This will give you an idea of the capital needed to enter the marketplace, while also providing you with the opportunity to calculate pricing and forecast your potential profit.