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Buyers who wanted to make a quick profit lose out, but newcomers can take advantage of falling prices and higher yields
Speculators who entered the British property market during the past year in the hope of making a quick killing will wish they hadn't, analysts say.
Investors who bought properties for long-term gain will survive the slowdown in the market provided they bought with cash or avoided taking out large mortgages.
According to Phil Tennant, regional sales director,  London, at Hamptons International,   some buyers who bought in the British capital  last summer, when prices were surging, may have overpaid because they were under pressure to complete deals ahead of others who wanted the same property.
'Those people who purchased last summer may have seen some drop from the peak,' he said.
Robert Hadfield,  managing director  of London-based property management company Pineflat  said: 'I suspect that anyone who bought in the past 12 months should steel themselves as they may well be under water now.
'Yields will be picking up for new buyers as prices fall, but that won't help people who have already bought.
'Cash buyers looking for safe havens probably need not worry unduly, but 80 per cent geared investors might want to revisit their objectives.'
Nationally, Richard Donnell,  head of research  at market monitor Hometrack,  said most recent investors would ride out the downturn, because returns were rising.
He said gross rental returns were 4.6 per cent in London and 5.7 per cent across Britain.
'Some [investors] might have to sell, but they are going to be a pretty small proportion,'  he said. 'The rental market is improving, so the good news is that the cash flow for investors is improving.'
The least experienced investors  would suffer the most,  he said.
'The small amateur landlord is being squeezed out of the market, because the cost of financing is higher than rental returns.'



Market turns against speculators