In a recent video for my YouTube channel, I talked about whether property is a good investment right now in 2023. What are house price is going to do, and how can you predict the housing market? What most people do is most people buy with emotions, and they normally take advice from the smart one in their family. Maybe it's their uncle that watches the news and pays attention to what's going on, and they'll say, “What do you think, uncle? Is now a good time?”
The problem with that is if you've got a smart uncle in the family that watches the news and reads the newspapers you will get mixed messages. BBC last week said house price rise in April in “Surprise rise”, and they're talking about how prices are going up right now. Then literally two, three days later, the newspapers will suddenly change their story. Then there is another story preaching doom and gloom.
So what happens is people get really emotional and fearful and excited. When emotions are high, intelligence is low. In this article, we will take a look at how you can decide for yourself whether now is a good time for you to invest in UK property.
1. Learn from history
The newspapers are literally trying to sell stories. They know that if they can trigger a reaction of excitement or outrage or fear, scarcity, that's going to get clicks. So I would really encourage you not to read the newspapers or to get your advice from the news. Instead, study economics and study history.
I've been in the market for 14 years. I've seen three recessions. I started during the Great Recession, 2008, 2009 crash. Then in 2020, we had a recession during the pandemic, and we're in a recession right now. I've not just got experience from the 14 years I've been in property, but I've also looked back over the last 50–100 years in the property market.
Let me give you a quick history lesson. Property prices tend to go up, and then they go down, and then they go up and then they go down. And the higher the up, then the bigger the down. However, on average, if you look back over the last hundred years, property prices double in value every 10 years. You might think, “Oh, come on, they're not going to double in the next 10.” Well, that's what they were saying 10 years ago, and that's what they were saying 10 years before that. I know because I remember.
2. Think long-term and buy with cash-flow in mind
If you're buying property, don’t buy it treating it like Bitcoin and hoping it goes up in value in the next six months. Buy a property you can hold for the long-term. That means you need to make sure that every month, the rent is more than covering the interest, mortgage payments, and you're in good positive cash flow.
There are some really smart ways to do this, for example, renting out properties as short stay lets. I'm investing a lot in holiday lets at the moment because, instead of renting a property out for a thousand pounds a month, you might be able to rent the property out for a thousand pounds a week! Another option is renting your property out as a HMO, a house in multiple occupancy, or maybe turning a cheap property into a much more expensive property and renting it out on a commercial lease with a fixed rent for 10–20 years.
3. Don’t put off investing in property
Someone once said, “The best time to plant a tree was 20 years ago, but the second-best time was today.” I think the same is true of property. What most people do, is they watch a Samuel Leeds video, and they're thinking, “Is now the time to get into property?” They're watching the market and the market drops a little bit, and they think, “Oh, I'm glad I didn't buy.” And then it goes up, and they get excited, and it keeps going up, and they get excited, and then it drops, and they go, “Oh my gosh, I'm glad I didn't buy.” And then it goes up again, and then, “Oh, you know, Article 4, Section 106, interest rates, etc” and it drops. Then it goes up, and then it drops. And then they die never having invested in property, waiting, waiting, waiting.
Someone once said, “Don't wait to buy property, buy property and wait.” Of all the investments, gold, silver, Bitcoin, business, stocks, shares, pensions, ISAs, I think that if you look at The Sunday Times Rich List, and if you look at what the actual really rich people are investing in, 90% of them seem to be investing in real estate. Why? Because they know that property is not only a great investment for the short term, but also a great investment for the long term, safe as houses, as they say!