Assetz sees window of opportunity for investors

Assetz believes that a brief window of opportunity is opening up for investors and homebuyers as lower interest rates take effect, coinciding with increasing pressure by banks on developers to sell existing stock and increase cash reserves.

The firm notes that there are now several buy-to-let mortgages available on the market at around 5.5%. With rates set on a downward trend and the cost of LIBOR continuing to fall, Assetz believes the cost of financing property purchases is set to dip even further in the run up to Christmas.

At the same time, banks are putting more pressure than ever on struggling developers to reduce housing stock, cut borrowing and boost cash flow as the recession takes hold. Consequently, professional bulk buyers are now securing discounts of 30 – 40% plus, off Royal Institute of Chartered Surveyors valuations. These valuations are themselves temporarily depressed on new build property whilst there is a stock overhang. These are likely to be the lowest prices for new build housing ever to be seen again in the UK.

Stuart Law, chief executive of Assetz, said: “The perfect moment has arrived for investors to re-enter the market, as developers rush to sell off stock at rock bottom prices, combined with a new lower cost of borrowing. This period will only last three to six months, before stock runs out, but it could work to kick-start the entire property market as competition among buyers returns.”