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    01 Oct 2021

    Is This the ‘Right Time’ to Invest in Property?

    Often, investors obsess over the idea of investing in property at the ‘right time’. The last year has been extremely challenging for the economy. Therefore, it does not come as a surprise that investors might feel apprehensive about whether this is the prime time to invest. Many buyers are questioning whether they should ‘wait it out’. However, we believe the market has created the perfect conditions for a profitable investment opportunity. Continue reading to find out why.

    The resilience of the property market

    Throughout periods of economic struggle, the property market has managed to recover. For example, during the Great Recession of 2007-2009, property prices were hit hard. According to data from the Land Registry Index, the average price of a property in the UK dropped by 18%. However, whilst these figures seemed bad at the time, the market began to recover much quicker than expected. By mid-2014, property prices had returned to pre-recession levels.

    In addition, if we take Brexit as an example, property prices dipped following the EU referendum. According to market data recorded by Halifax, property prices in the UK fell by 1% in July 2016. However, this is a much lower drop than the 10% decrease predicted by the Treasury back in May of that same year. When we look forward to now, prices have continued to rise, especially in the Northern regions.

    As we can see from history, in the long-term, you will almost certainly not lose any money investing in property. The average property prices have almost tripled in the UK over the last 20 years from £89,000 in 2000 to over £250,000 in 2021. This exceptional growth covers both periods of financial uncertainty. As long as you are able to hold onto your property for a long period of time, you can be certain it will increase in price.

    Is now a good time to invest?

    The most successful investors are those who act fast and take advantage of an opportunity when they see one. In times of economic uncertainty, some investors choose to behave cautiously. However, the property market has shown repeatedly how robust it can be. Therefore, successful investors are taking advantage of the economic fluctuation to maximise their returns. For example, while prices are at a below-market rate, successful investors would know to take advantage of this.

    Once the COVID-19 pandemic ends, the property market will recover. Thus, your property will increase in value. Therefore, whilst you may be doubtful about investing in a period of uncertainty, now is the right time to invest.

    Long-term growth

    uk house price growth the highest level

    When it comes to deciding on the right time to invest, you need to bear in mind that property investment is a long game. Essentially, the longer you can hold onto your property, the higher the returns on your investment. Despite the challenges the market has faced, the outlook for UK property remains exceptionally positive. According to the UK house price index, over the last year, there has been the highest level of growth since August 2007. Investors can be sure that even throughout peaks and troughs, prices will eventually rise.

    Rental demand

    Another factor that comes into play when debating the right time to invest, is rental demand. For buy-to-let investors, they want to be sure that rental growth is trending positively, and demand is high. Therefore, following the pandemic, many buy-to-let investors are questioning when the security of the current rental market. The pandemic saw a shift in buyer preferences.

    Demand dropped in city centres and moved towards commuter towns. However, we are currently beginning to see the ‘swing back’ of the pendulum. Renters are beginning to return to a city life similar to that of pre-COVID. Consequently, rental market growth forecasts are looking extremely positive. Demand levels are nearly 80% higher than what they were in 2017-2019. Therefore, when deciding the best time to invest, the consistent rise of rental demand is promising.

    CityRise Verdict

    Essentially, it does not matter when you buy, just that you buy wisely. There is no ‘right time’ to invest. If you want to achieve the highest returns on your investment, the key is to hold onto your property for the longest amount of time possible. It doesn’t matter what is going on in the market if you educate yourself and learn the best technique to invest in property. If you know what you are doing, you can make money in property whether it’s rising, falling, or staying the same.

    Whatever your situation, it is critical to recognise that property investment is not a short-term endeavour. Those who enter the market anticipating massive returns in three to five years will be disappointed. All property investments should be made for a minimum of five to 10 years, but typically for much longer.

    Despite the occasional pessimism about the short-term market, you should be looking at the market from 2025 to 2030 and beyond. Of course, this is extremely difficult, but all historical evidence and projections show that property has always recovered, has always performed well, and will continue to be the cornerstone of any smart, long-term investment strategy.

    If you want to speak to one of our expert advisors about your next investment, visit our website here.

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