Is This A Good Time To Own An Investment Property

For those of us who have enjoyed income from investment property over the last few years, the ground is looking a little shaky to say the least. Houses prices have slumped, interest rates have risen, the cost of living has gone through the roof and people are extremely wary of buying, selling or even renting property due to the current economic situation.

However, while home owners may complain about losing several thousand pounds on the value of their investment property, spare a thought for the owners of Canary Wharf. The value of their portfolio of property has dropped by 500 pounds million in just over a month, according to their latest release of figures.

Much of this has been due to the collapse of some major businesses that were leasing office space in Canary Wharf. Lehman Brothers were renting office space from Songbird's portfolio of investment property at a rate of 41 pounds per square foot that was due to rise later this year to 53. pounds Lehman Brothers lease was due to run for another 25 years and this will lead to a vast hole in the rental income for landlords, Songbird.

It is hoped that this will be largely turned around after Asian financiers Nomura implement their proposed takeover and will be looking to employ much of Lehman's ex staff. Though it is unlikely that they will take on all of Lehman's staff, a good proportion will be back in paid work very soon and they will be needing office space - so hope Canary Wharf landlords.

All office space across London has dropped by up to thirty per cent in the last year due to economic difficulties but Songbird still have over 99 per cent of their investment property on Canary Wharf let, which means that they, at least, have hope of riding out the storm.

Of course, these bigger companies will lose a lot more money than the average man in the street because of the fact that they have more invested more money in the first place but losing a little can have a much more devastating effect on the average person who cannot afford to lose a penny. The majority of properties are not investment property but have been purchased as a family's main home and when the credit crunch bites so hard that mortgages can no longer be afforded, repossessions happen and families are homeless.

This then puts the onus on local authorities to re-house people but they are already under enormous strain trying to house immigrants and the poor or homeless. Because of this, local authorities often turn to housing associations and even private landlords to re-house the people on their lists. This is all very well while private landlords can still afford to keep property that they rent out but this isn't looking promising either.

This is a dilemma that many people have seen coming for ages and it is frustrating to see the executives of the big financial institutions raking in ever higher bonuses. What most of us would like to know is what these bonuses are for, how the banks can afford them when they are all struggling, where this money is coming from and why isn't it being ploughed back into the system to ease the situation?

At the end of the day, the average man is pretty much helpless in the face of these financial difficulties and we are left using our own judgement on how to keep our heads above water but we do have the option of how we vote when it comes to how the government deal with this crisis.

Article Source: http://www.propertymagnate.com/articles

Shaun Parker is a leading financial expert with many years of experience in the property markets. Find out more about investment property at www.propertyinvestment.co.uk

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