At a time of national security issues and international unrest, the main news headlines still focus on financial issues. There can be no doubt we are still a long way from resolving the problems unearthed by the financial crisis.
Admittedly, much of the recent news has focused on issues in certain parts of the eurozone where the concerted efforts of the strong are finding it increasingly demanding to prop up the weak, but it is becoming increasingly apparent that short-term fixes may be ineffective and that more profound changes may be required to provide the solid base for future progress. Now is perhaps not the time to contemplate a sterling investment in the eurozone, even if some prices look attractive.
Similarly at home, it is now understood that the problems facing our market are complex and will not be fixed even in the short term by a quick fix. Too often, the “magic” solutions that are offered favour particular sectional interests and could easily be of harm to others. Is the answer a failure of banks to lend, complex planning processes, consumer concerns, or is it a change in habits, maybe people are moving away homeownership being an ambition? Is new research being carried out to establish the truth or is housing strategy being based on stuff that belongs to the last century?
Low interest rates have provided a cushion for many borrowers but recent months have seen a growing strain on personal finances as increased prices work through and employment prospects become less certain. The projected rise in interest rates towards the end of this year will mean that debt servicing will become more difficult and it is hard to see how repossessions will not become a more frequent event.
The rising cost of debt servicing is also likely to dampen life in the housing market and may lead to a further fall in prices.
So if homeownership is going to be more difficult, that still leaves the problem that demand for housing is increasing.
The UK population is projected to be heading upwards to 70 million and more and more people are choosing to live in single-adult households.
All social housing is being affected by cuts in public finances and there is no prospect of this sector being able to meet demand for other than the most needy. For many, their only option will be in the rented sector.
This need not be seen as a backward step and it is a common practice in many parts of Europe.However, the role of landlord is not one for the amateur. There are complexities of financing, insurance, maintenance, pricing and documentation which all have to be understood before any thought is given to attracting a suitable tenant.
A rental property is not merely an investment, it is also a time-consuming asset which can form the fixed asset for a business venture and will need knowledge and skills specialists with experience in key areas.
Ensuring the property is correctly managed will ultimately provide the best experience for the tenant and the landlord.
Richard Fox is chief executive of the Society of Mortgage Professionals