The UK Property Market is in crisis at the moment, especially if you believe all the negative press items. There is no doubt that things are not good. I have a good insight into the state of the housing market through my “day job” (no I am not in real estate). Currently many house builders/developers are finishing off existing developments and are not going to start any new ones. Many builders are laying off employees in the trade already. Now this makes some short term financial sense for the builders, as there is no point in building houses that will not sell.

However, there are some things that will remain unafected by any credit crunch or housing crisis. People will still get married, divorced, upsize, downsize, kids will leave home etc. On top of this we will still get immigration. All of this creates pressure on the housing market that will always be there. The supply of new houses is not like a tap, you can’t just turn it on when needed. Housebuilders are turning the tap off and it will take a long time to turn it back on again. Couple this with people reluctant to put their house on the market will actually result in a shortage which will in my opinion support prices to a degree. I do not believe there will be a housing “crash”, just a significant correction.

Of course, in times of uncertainty in the housing market, more people look to rent. Therefore rents should start to increase.

So in answer to my own question, do I sell up my Buy to Let properties or not? I think I am just going to hunker down and see this out for the next few years. I may have to supplement the rents received to cover my costs in the short term, but I am in this for the long term.

DYOR

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