UK Properties Snapped Up by Opportunistic Investors

Research by Allsop and Essential information group has found that almost two-thirds of residential UK properties bought in the fourth quarter of 2008 were bought as investment rather than to live in. The research also indicated that the current bargains on the market are bringing in a wave of new, possibly opportunistic first-time investors to auctions; with over half of the investment purchases being made by first-time auction buyers.

Gary Murphy, auctioneer at Allsop, said: "In the last three months of last year, 48% of people buying were first-time auction buyers -- essentially novices.

"It just shows you how popular auctions have become as a method of either buying a home or property for investment.

"Only a third of people bought for occupation - the rest is investment."

Allsop also revealed that 75% of properties on its catalogue in 2008 were repossessed properties, this possibly accounts for the buyers being predominantly 'novices', because most knowledgeable and experienced investors and analysts are aware of the possibility that too many people investing now to sell when the market recovers, could actually stunt the recovery when it begins because the market will be flooded with properties, and oversupply will become a major issue.

The scene is largely the same in America, and throughout almost (if not all) countries where markets have been badly affected by the credit-crunch; shrewd cash-rich investors and property funds are snapping up bargain properties and repossessed properties as investments, the latter to release the properties gradually into the recovery, the former possibly not being so clever and damaging a possibly short-lived recovery.