Investors Flee Property Markets
For many years the UK property investment community has been very buoyant with a growing exposure to many areas of the world. However, as the credit crunch continues to hit home we are seeing more and more UK investors move out of emerging property markets because of financing issues. The sector has also seen a substantial fall in property prices as the more speculative end of the market comes under renewed pressure.
While normally in current conditions you would see a flight to quality, many investors are even refraining from entering the more traditional markets – with many actually reducing their exposure where possible. There is unlikely to be a marked change in this situation in the short to medium term as UK investors grow more concerned about the immediate outlook for property.
The buy to let sector is one area of the property sector which has performed relatively well of late but there are even concerns about this area of the market. As the economy comes under renewed pressure some tenants may soon struggle to cover their month rental obligations which will in turn put many property investors under pressure. Many buy to let empires rely on the income from earlier properties to cover later additions, with the potential for a knock on affect if tenants default on rental payments.
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