The UK property market has been one of the strongest performers in Europe in recent times and in many ways we have now become accustomed to constant growth. Even if we set aside the rights and wrongs of the current scaremongering surrounding Brexit, history shows there have been periods of consolidation and in some cases falling prices. So, where do we stand today with regards to investing in UK property and what are the prospects?
Unfortunately the mass media in the UK, and indeed around the world, have a massive influence on short to medium term investor confidence. In what could become a case of a self-fulfilling prophecy, unless we are careful, constant talk of falling UK property prices has seen some investors disappear to the sidelines. The fact is that at this moment in time there has been little if any impact from the Brexit fallout and indeed more and more experts are now suggesting Brexit could actually be a positive for the UK property market going forward.
Long-term investing is all about taking opportunities as and when they arise and there is no doubt that opportunities are arising and this will continue for some time to come. This constant drip of negative media coverage, while prices continue to hold up, will eventually see some property owners deciding to take advantage before “prices fall”. Once we reach this point there will be some major opportunities for selective investing and taking advantage of those who have been influenced by the mass media.
We are talking about selective investing for both capital growth and rental income perhaps with more focus on long-term rental income while the UK comes to terms with life after the European Union. As we have mentioned on numerous occasions, many countries are already knocking on the door of the UK to arrange separate trading agreements which are far simpler to conclude compared to the European bloc arrangements. Let’s not forget the UK is not the fourth largest economy in the world because it is part of Europe, it has always been a major player on the worldwide stage and will continue to be so for many years to come.
Cash is king
In this world of confusion and concern cash will always be king because there are no property chains and literally once the deal is confirmed the cash is transferred without delay. It is also worth noting that while the media seem to portray doom and gloom it is very different for the UK mortgage market which continues to grow. While some of this growth is connected to historically low UK base rates, with a further base rate cut expected in August, there is still underlying demand for UK property investment funds.
If UK base rates do fall as expected then mortgage rates will follow to a certain extent. Could this then prompt the next wave of remortgaging and refinancing across the UK property market? The ability to lock into historically low fixed rates is something which many property owners and investors will find far too tempting. Can you really blame them?