With developers keen to maximise their returns, purchasers can often negotiate a discount on asking terms. This has led to a number of buyers paying their 10% deposit and, with a long period until the building is complete, gaining an uplift in price and realising their profit. Some ventures have sold up to 50% of their flats to investment buyers.
However, Christopher Griffith-Jones, developments and investments director at Chesterton, said, 'With capital growth in the re-sale market slowing considerably, such short term speculative investment purely for capital gainis expected to tail off.'
With recent reductions in the cost of borrowing and further falls in the bank base rate likely, there is no forseeable tail-off in demand from investors according to Griffith-Jones. 'The only sign of slow down in the market is for properties over £1.5 million ($2.1 million),' he says.
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