What are the differences between investing in a property now and investing in property 2 years ago?
Well in 2007 property was seen by or rather pushed my the media as an ever expanding bubble with strap-lines like "Property only ever goes up" and "You can't go wrong with bricks and mortar".
And so the DIY property developer hit the estate agents fuelled with the previous nights greed fest programs like "Location, Location, Location", once arriving at the estate agents the potential google eyed buyer would be presented by a plethora of houses to choose from to start their new Buy To Let empires.
The price was not important, the deposit was so small that it was not important, the income was not important and the ability to pay back anything other than the interest over the next 20 years was not important.
Why? because "House prices only ever go up" so as soon as you got your mortgage you would fill that house with someone to rent it who would pay your mortgage, provide you with an income and may want to buy the house back of you in another few years when houses had doubled in value again.
leaving you able to buy a new house outright yourself to rent out for your pension.
And this was just one of your many buy to let homes all of which would one day make you very rich indeed.
All you had to do was qualify for a mortgage and that required the difficult test of signing your name on a dotted line.
Then the credit stopped and tumble weed was spotted blowing into BTLville.
The once buoyant HMS property market now started to take on water but the lifeboats had been left back at dock and the sea was full of sharks with a particular taste for persons who are up to their eyeballs in debt.
The buy to let owners were told not to listen to the like of housepricecrash.co.uk and their doom and gloom, they were trying to talk the market down and were unaware of the "Strong fundamentals" which our Prime Minister told us would ensure that the property market would not and could not crash.
Words that were repeated by the media and so called experts (even though no one knew what exactly he meant by "Strong fundamentals") to ease any possible downturn in the housing market.
But it was all too late the life blood of the housing market who are the first time buyers found themselves unable to get a mortgage because the mortgage products that supported house prices had been withdrawn and the remaining products were tightened up to a level that made meeting the criteria of a mortgage about as possible as Jermaine Greer entering Miss World. So house prices started to fall and the buy to let mortgage products were removed almost without exception.
So guess what happened next?
We all decided to let the market correct itself and allow the banks to fail, we shored up and ring fenced personal savings and pensions and started to see new green shoots 12 months later!…eeerrrrmm no we didn't.
Instead our chancellor in his infant wisdom decided to take all of our public spending money and keep the banks afloat with it and destroyed the pound and borrowed more money than any government in the history of the U.K. and enslaved our children with debt as soon as they were born…….well he had to something its just a shame that it wasn't the right thing and all in the name of the property market.
And what did this all do for property investment in the u.k. now in 2009? Well has it joined the Dodo except the Dodo if it could be resurrected would be welcomed back unlike property as an investment.