This is the most common question, regardless of where the property market is
Every week, I get asked “is now a good time to buy?” or “is it true, are we about to experience a major crash, shall I sit back and wait before I purchase a property?”
Everyone wants to buy at the bottom and then be sat on a nice little nest egg when the property market rises in value – that’s just basic human nature
One of my favourite expressions (allegedly from Mark Zuckerberg but not sure if that’s true, we can just pretend that I came up with it)
“Perfection is great but doing it is better”
From my experience this is especially true when it comes to the UK property market. At the point when I have purchased every property, it has never been the perfect time. Its only with hindsight looking back that it becomes clear that it was a smart move
Steve jobs said in a famous speech at Stanford, “You can’t connect the dots looking forward; you can only connect them looking backwards”
This same principle applies with the property market. If we had known the events of 2020 would have such a dramatic effect on property prices, then we all would have been snapping up property in 2019
By 2020, what was an expensive property in 2019 seemed like the bargain of the century. It’s for this reason that I always suggest to people that they take a long-term view
When someone asks me “is now a good time to invest in UK property”, my first question will always be “what do you want the property for?”
A property for your family to live in is a very different prospect to wanting to make a quick buck. In both instances the purchaser wants their investment to increase in value (that’s just basic human nature)
Most people in my position (helping others to make money in property investment), will sell you the dream of getting rich quick through property development. I’m the opposite, I believe in creating sustainable income, insulating yourself from hard times (yep, they do come along)
The “get rich quick” formulas can seem extremely appealing; I’ve been sucked into them before – I’m yet to see any of them materialise into anything real though
That’s not to say it’s not possible to earn a lot of money quickly (I once earnt over £100,000 from 13 weeks of work). What I am saying, is if you chase after that, you may get away with it a couple times but soon enough your judgement will become clouded, and you will most likely lose out
By adopting a long-term mindset, it allows you to take advantage of potential short-term advantages, but you are not reliant on it
If you follow the mainstream media, you will believe that the UK property market is going to hell in a handcart. It often sounds like the apocalypse is coming, it’s very much doom and gloom
I prefer to not just rely on one source; I also speak and listen to a number of different estate agents. They have a much more optimistic viewpoint – mainly because their income is from people buying and selling houses. It’s therefore, in their interest for the future to look rosy
Although optimistic (and slightly biased) often they will utilise some of the latest statistics from websites like Rightmove. When you dig into the data you will see that the UK property market is not in an absolutely terrible state (as the mainstream media will lead you to believe). The data I have seen indicates that we are returning to a normal market. This December is looking much like December 2019. Yes, its down on the past two years, but we have been in a super inflated price market, in my opinion this was not sustainable
On the 3rd July 2022, I put a video on YouTube, I called “Is the property market about to crash?”
In that video I shared my thoughts on the property market, at that time. In a nutshell, I said, I didn’t believe we were going to experience an epic crash as many were talking about. Instead, I felt that the market would level off a bit, the hype would be taken out of it, and we would return to a more normal market, like that of pre 2020.
The market has indeed calmed down, we are returning to a “normal” market, pre 2020, I am sticking with what I said. There are a lot of reductions coming through on Rightmove every day, the reason for this is that a HUGE number of properties were overpriced.
Indeed, the most desirable properties were selling very quickly for a large premium. The problem is that people with properties that do not fit this category assume their (average at best) property must also be able to reach a premium – thus they are listed for more than is achievable. Something is only worth what someone is willing to pay for it – the market doesn’t lie – if it’s not worth it, then it won’t sell – simples!
I suspect we will still see some market consolidation, it maybe that the average price will drop by another 10%, personally I would not consider that an epic crash
Of course, this is just my opinion, if anyone ever tells me they know exactly what’s going to happen with any market, my first question is “are they a billionaire?” If they are not, then they are obviously not practicing what they preach – il take it with a pinch of salt
I spoke to someone I know recently, he’s around 30 and looking to purchase his first property. He will live in it, but is looking at it as an investment. He wants to add value, sell it at some stage, using the gained capital to buy something bigger and keep moving his way up the property ladder
When he said he was looking at property, I asked if he was not worried about all the doom and gloom in the media, this is the response he gave
he said; “I’m doing my research, learning about the property market in my local area, I’m not jumping into anything, I’m taking my time. The places I am looking at all need work and there is plenty of value that can be added.
Indeed, the market may drop a bit over the next 2 years, but I know over the long term it will be a good investment (just look back over historic property values). I’m better to get myself onto the property ladder now, than sit around thinking about it and waiting for another 5 years – hoping for the PERFECT time”
He literally took the words right out of my mouth, he’s not expecting to become a millionaire overnight. He knows it will take hard work and dedication but over the long term he will come out winning
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As always, if you have any thoughts or questions on this or anything else property related, I would love to hear from you?
Cheers George B