A slump in the UK property market has been regarded as the first casualty of the global economic slowdown. Yet this isn’t the time to write off its potential entirely, says Property Correspondent Emma Mahony

ANYONE WHO REGULARLY dips their toe in the property market – someone looking to buy to let, or put capital into housing – will know that the time to trade up is during a recession, when you will get more bricks for your money. While no one dares to use the “R” word as yet, there is little doubt that with the credit crunch and rising oil prices, tougher times are here. The most trusted Land Registry figures for the past quarter (end of May 2008), tracking the volume of completed sales nationwide, showed an overall decrease in house price inflation of 2.7% – the lowest level since November 2005. Whereas 18 months ago, an investment property might have been fought over by first-time buyers or developers, now a more solid, dependable buyer is having the market to themselves. So how is the current climate impacting on different areas for investing?

> London
Clapham in south-west London is seen as a good place to invest because of its abundance of small flats and bigger family houses for letting. As lettings manager Caroline Dude of Hamptons reports: “Relocation agents have been active despite reports that their activity may be more limited given the financial climate in the City.”

The area hit the worst of the credit crunch up to December last year, when prices fell to an average of £333,417 compared to a peak average of £453,832 from April to June a few months earlier. Now the market is recovering and prices are back up to an average property price of £488,053, according to the latest Land Registry figures, proving that it is an area which will weather the worst of the housing market storms. Price of 1-bed apartment and 3-bedroom apartment/house:
£275,000 and £500,000 respectively
Estate Agents: Hamptons, +44 (0)20 7498 8686; www.hamptons.co.uk

> Nottingham
Unlike London, Nottingham started with a slow beginning to the year, but investment buyers have been entering the market since the beginning of the summer to pick up deals as the rental market starts to overtake sales. James Gamble of the Nottingham agency Thomas James comments: “Sales have slumped by around half in volume since this time last year. However, a number of new-build apartments have recently come on the market after a five-year building boom, meaning that the one- or two-bedroom apartments in the student areas of Lenton and Arboretum are attracting investors.

“We are seeing a different type of investor,” Gamble points out. “One with their own money behind them rather than relying heavily on a mortgage.”
Price of 1-bedroom apartment and 3-bedroom apartment/house:
£80,000 to £150,000 respectively
Estate Agent: Thomas James, +44 (0)845 296 0746; www.tjea.com

> Glasgow
Scotland’s property market differs from its English neighbour’s because of its “offers over” system, where the lowest reserve price is placed on a property which may go for around 35% more. This gets around the gazumping problem because sealed bids are invited by a definite closing date. Glasgow has not enjoyed the same property boom as the rest of the country, so it is not expecting the same downturn, but Andrew Perrett of Savills admits that the “volume of sales has definitely fallen – except in the top end above the £2m mark”.

The city’s West End is still the place to invest, where the universities and hospitals are sited and a more bohemian lifestyle is enjoyed, as well as Glasgow Harbour – the biggest brownfield regeneration project in Europe – where 650 apartments were sold as phase one of the project in 2003. Price of a 1-bedroom apartment (Glasgow Harbour) and 3-bedroom apartment/house: £300,000