Trends Affecting Property Investment Potential

Off Plan Investments offers some valuable information into the certain trends that help drive house price fluctuations and rental demand. There are very many variables, but the key thing to remember is 'supply and demand'.

Trends that lead to increasing demand and trends leading to reducing supply, and the combination of these together - will drive property prices up. The converse is also true. House price markets can be incredibly localised - even within a street, or small part of a town. The same is true for rental properties - the less rentals coming onto the market and the more renters looking for property in the area will drive property prices up, and vice versa.

We believe that our current Invest North West initiative holds some of the best examples of investment property opportunities. But rather than specific areas being important, it's more the concept of why an area is good against why an area is not which is the answer.

These concepts can be applied to any area in the world because they are essentially based on supply and demand. Where demand outstrips supply, house prices go up, and where demand does not outstrip supply, house prices go down. So the key is to see which factors and trends will lead to demand going up and supply coming down for a specific property type in a particular area.

We at Off Plan Investments make a concerted effort to insure that our investment opportunities offer no cause for concern when it comes to supply and demand. We offer a detailed analysis of the rental market within both the immediate and surrounding areas using valuation comparables, to ensure that your proposed investment property is a suitable location and can be fully tenanted from the moment the property completes.

Positive Change

Now, the key variable that would lead to strongly underpinned capital value increases – and indeed sometimes stellar increases is “positive change”. What is a positive change? Something that happens in an area that increases demand for property. Examples include:

1. Infra-structure: A new railway station reducing commuting time to the City from 40 mins to 20 mins.
2. Jobs: A company sets up a new office creating say 2000 jobs in a town of 50,000 population.
3. Regeneration: The area has an injection of public and private funds with new facilities and “gentrification” of run-down areas
4. Demographics: The population increases, which increases demand

These forces tend to drive prices up – if you get all four together, you will experience stellar rises such as has been seen in selected areas of London, in the last 10 years the price of 1 bedroom flats has seen growth quadruple from 30,000 pounds in 1997 to 130,000 pounds today and they are still rising. However, past performance is not indication of future performance. If prices have already gone up four-fold in 5 years, although it maybe a good long term property investment, it may not be so wise to purchase as a first time investors because you could be caught out if the market decided to take a dip.

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