Last updated at 09:53, Monday, 28 July 2008

Housing market analysis continues to be sobering due to the slowing economy, tighter credit conditions and insufficient confidence.

• Vist the Cumberland Building Society website

Check it out: Out-perform a difficult housing market by buying a property with potential – perhaps in an area due for regeneration

According to Nationwide Building Society’s housing market report in July, annual house price inflation fell by 5.3 per cent in the north west compared to a fall of four per cent nationally.

Irrespective of falling house prices there are ways to out-perform a difficult property market and still make a profit. These include:

• Buying a property with potential for basic improvements in terms of layout and fittings
• Buying a property with scope to extend easily in order to increase the size of the accommodation
• Buying a property in an area where popularity is set to increase in the short term
• Buying a repossessed property or a property where the seller requires a quick sale

It’s usually possible to improve the layout of rooms without involving major structural changes. Opening hallways, removing doorways or corridors and repositioning partition walls can be relatively straightforward and cost-effective, providing more contemporary accommodation and better use of space.

Bathrooms can often be inexpensively face-lifted by changing tiles and taps. A similar approach is sometimes possible with kitchens by simply replacing door fronts and worktops. Applying simple, neutral decoration is most likely to please the majority of the market. By transforming the appeal of your property you can significantly enhance its saleability and value.

In most cases it’s cheaper to organise building extra accommodation yourself rather than buying a more spacious property on the open market.

For example, adding a fourth bedroom to a three-bedroom property will open up a whole new market when it is offered for sale. Fourth bedrooms can easily be provided when you can use attic space or extend over an adjoining garage. Adding single-storey rear extensions, especially over the full width of a property, can dramatically improve living space but care is needed to ensure you retain enough garden.

Needless to say detailed costings for any extensions are needed and must be compared to the extra value that they are expected to add to the property so you can consider the profit margin.

Undertaking research will unearth the prospect of any potential growth in popularity for a residential area which may increase demand and, therefore, cause local property values to rise.

For example, a programme of investment for regeneration, the provision of a by-pass road, new school or university etc should help to attract more buyers.

Finding a bargain price property is normally the simplest way to make a future profit.

The cooling housing market has resulted in progressively increasing numbers of repossessions. These properties are occasionally sold at very competitive prices when they appear neglected.

When demand for property is low there is normally plenty of supply, so if you’re a proceedable buyer you should exploit this by:

• Searching the market thoroughly to find competitively-priced properties and viewing as many of them as you can to make comparisons
• Preparing before you place an offer by researching the market and finding out what properties are currently selling for compared to their asking prices
• Identifying where sellers are keen to achieve a quick sale and making sure you take advantage of this during the negotiating process
• Simultaneously making offers on a few potentially suitable properties and making sure that each seller is aware of this

• Nick Elgey is managing director of Cumberland Estate Agents.
• Visit the website at www.cumberland.co.uk

First published at 05:35, Friday, 25 July 2008
Published by http://www.cumberlandnews.co.uk