Has Time Been Called on Property Investment?

At the time of writing, property prices continue to fall, and we are warned that there is more to come.   Banks are not lending and people cannot raise the deposits.  Developers are not building as they cannot be sure that they will be able to sell their developments.  Now the Government is talking about stepping in with government backed 95% mortgages.  The property market seems to be in a never ending decline.

Right now property may appear as a most unattractive investment strategy.  But is it really as bad as the newspapers would want you to believe?  Remember the fundamentals:

1. Everybody needs somewhere to live.    
2. The UK population continues to grow (By 470,000 between 2009 and 2010 according to the Office for National Statistics)
3. If builders are not building demand for housing increases as supply decreases

Property isn't just about capital appreciation over so many years, excellent though that usually is. Property can actually be a two-way, profit-making alternative investment. You can let a property during your period of ownership and the rental income from this should cover any borrowings you might have on it, and perhaps even provide a little extra profit for you. At the same time, property is also that capital investment.

Viewed over time, property is an out-and-out winner - it goes up...and up...and up in value despite sometimes a short-term ‘crash’ (which always look like small corrections on the graph rather than any real crash).  Look at any surveys that compare all sorts of investments over, say, 5, 10, 25 years or more.  One investment opportunity stands out above all others is property!