Housing Boom: To Buy or Not to Buy
Various events in the last few years have significantly impacted the housing market in the United Kingdom. These include:
- Brexit, referring to the UK’s withdrawal from the European Union (EU) as of 1 February 2020.
- New legislation concerning HMOs and property investing in general; In Wales, for example, all landlords that self-manage their properties now require a license.
- Tax changes, such as the introduction of Section 24, which essentially states landlords cannot claim their mortgage interest or other property finance costs as tax deductibles.
- COVID-19 pandemic, which led to the Coronavirus Act 2020 that saw the eviction notice period extended.
But regardless of these events and laws, property prices have been going up. “Why?” you ask? As I explained to the students in the property investors crash course, it would take hours on end to demonstrate why house prices keep going up. And it would also involve rather complicated property talk that will easily deter ordinary people from investing in property.
But make no mistake, I don’t consider myself extraordinary. I left school with 3 GCSEs, so I’m no genius. I’m just an ordinary guy. I, therefore, totally understand why property investing, property market, real estate, mortgages, taxes, and economics may appear far too complicated. My job in the crash course is to simplify all those aspects of the housing market, allowing my students to predict the market.
“In fact, you’re going to be able to understand property than most property professionals that have been in the industry for 20 years by the end of this crash course,” I assured the attendees.
Now back to the topic at hand, how can you predict what will happen in the market? If past trends are anything to go by, the property market goes up and down, then goes up and back down again. The up and down cycle has been going on for centuries, the reason being the housing market typically follows the law of supply and demand.
Given the up and down nature of the property market, the fear of losing money can cause you to hesitate in investing in property. Such that, while you have decided you want to buy property, you want to wait for the best time to invest. Warren Buffet encourages us to be “fearful when others are greedy and to be greedy only when others are fearful,” and I agree.
But that said, there are a few things you need to know before you buy your first property. Don’t be like Bob, who “doesn’t want to go on my crash course because he’s too busy. He’s a professional, right; he’s a busy boy Bob.” So Bob finds a property and starts talks with his mortgage broker but withdraws from the property purchase the second the market begins to dip.
Thinking he’s saved himself from a significant financial loss, the housing market goes up again, then down again, then up again. And as long as the up and down cycle continues, so does Bob’s procrastination cycle. So before you know it, Bob is dead, having never invested his money. Sadly, that’s how most people live hence miss out on what could be lucrative property investments.
There is this old riddle I love. It goes, if five frogs are sitting on a log and four decide to jump off, how many frogs are left? Is it one, perhaps none? Some of my students said four, but the correct answer is five. Why? Well, there is a difference between deciding and doing. Just because four frogs decided to jump doesn’t mean they jumped, similar to Bob, who decided to buy property but never did.
So what’s my point? How long the housing boom lasts shouldn’t be the determinant for whether or not you’ll buy property. The people who make money in the housing market don’t wait to buy property, but buy property and wait instead. After all, even if it dips, the property market will always go up.
So instead of trying to work out what will happen in the next 6, 12 months, buy a house today, hold on to it, rent it out, and earn returns in the form of rent. What matters is what happens over the next 20 years, not the next three months.
Share this video: https://youtu.be/gZO3l4qUgew
🎥 How to build a property portfolio from scratch in 7 DAYS: https://youtu.be/RWEkj1y8XKs
📖 My favourite book: https://amzn.to/39VcYLa
❓ Have a question about property? Join my Property Facebook Group: https://www.facebook.com/groups/77861…
🗣️FOLLOW ME ON SOCIAL MEDIA:
Facebook Group: https://www.facebook.com/groups/77861…
Facebook Page: https://www.facebook.com/OfficialSamu…