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Which?: Profits from UK property still possible

Friday, 7 March 2008 12:00 AM

Despite warnings of a gradual decline in prices, it is still possible to make a profit on UK property market, according to Which?, the consumer watchdog.

The body will publish its latest guide, The Property Investor's Handbook, on March 10th, and argues savvy investors willing to take risks will still be rewarded.

While acknowledging it is now more difficult to make profit from traditional property investments - such as buy-to-let and renovation - it suggests canny investors should move into less conventional investments.

For example, buying properties off-plan from a developer - often regarded as a highly speculative form of investment - can provide a profit if a large discount is negotiated with the housebuilder.

This type of discount is more likely in this type of purchase, but Which? warns investors it is essential to carry out their homework first. Building a sound knowledge of the local property market and ensuring the property's real worth matches developers' claims are crucial starting points.

"When the housing market is unstable property tends to fall out of favour as an investment," said Kate Faulkner, author of the Property Investor's Handbook.

"But many people don't realise property investment opportunities come in many forms - from joining a property fund to snapping up pieces of land. Done properly, investing in property can still provide a good return, but people need to look beyond buy-to-let and renovation."

Another suggested investment opportunity is the conversion of commercial property into residential accommodation.

Buying land for construction can also prove profitable, but both of these options require considerable finance and expertise.

"If you're thinking of having a go, my first advice would be to really do your homework. Make double-sure you know exactly what type of investment is right for you, how much you can really afford to invest and whether property will give you the return you're looking for," concluded Ms Faulkner.

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