Time For The Speculation To End

The old saying "speculate to accumulate" may ring true - but in more than one way when it comes to the buy-to-let market. Accumulating failure appears to be the way for some in the buy-to-let market as the nature of the industry and the state of the housing scene tilts the advantages all towards the long-term landlord.

Such a point was made by Tom Entwistle, editor of landlord portal Landlord Zone. Mr Entwistle pointed out that where prices are falling, the speculators are in for a hard time, but not those who are looking to rental returns for an income now and the market to rise over a much longer period of time than just the next few months.

He stated: "For the established landlords that are running this as a business, as opposed to the ones who have just gone in for the speculative investment, they are happy with it [a situation of falling prices].

"It doesn't really matter what the price of your property is if you are renting it for the long-term. And if they do drop, some of them will be buying in," he added.

This was particularly true, Mr Entwistle noted, of areas where there is an oversupply of flats. One prime example of this was produced by property website email4property.co.uk. This site, which found Bristol to have enjoyed the highest house price growth of any city in England and Wales outside London ( 9.2 per cent), also found lower figures in cities such as Birmingham. According to the latest Land Registry figures the second city has seen annual prices up by a much lower 3.7 per cent. One contributory factor to this was the 5.5 per cent fall in prices in central Birmingham, where nearly all sales have been for flats.

Of course, there may be other possible factors at play, such as the regional fact that the south west has seen higher house price inflation than the midlands. But David Bexon, managing director of email4peroperty.co.uk, said that errors had been made in the renewal and rebranding of such cities, stating: "In some cases this has led to available housing disproportionate to the requirements of the local demographic."

For the long-term investor, meeting the needs of the local demographic is the key, whether this is flats for professionals, student houses near a university or larger homes for families. For the speculator, a rush into the wrong type of property in the wrong place and at the wrong time has been a bad move. As Mr Entwistle concluded, those guilty "Jumping on the bandwagon and seeing this as a great way to make money quickly" will be "the ones to suffer".

In today's world Property investment is an excellent investment option especially investment in UK