Over the past 10 years or so, since the events of 2008 sent the global economy into meltdown, there has been one theme that has held true in the investment world. Just as our parents and grandparents told us in years gone by, there’s no better investment than bricks and mortar.
This brought the phrase buy to let to the forefront of the investment landscape, and suddenly the world and his wife was snapping up student apartments, suburban terraces and anything else they could lay their hands on and drawing up agreements with willing tenants left, right and centre.
Over the past year or so, however, there has been a sense of disquiet. It started with the increase in stamp duty that caused many would-be private landlords to reassess their projections and see if property would still bring in the returns to justify the effort and commitment of tying up their money.
Then, the first chinks started appearing in the property market, particularly in the capital, where average prices dropped by 1.9 percent in the second quarter, and a further 0.7 percent in the third.
Finally, there is the spectre of Brexit hanging over everything. With all these things in mind, should we still be following the advice of past generations and investing in bricks and mortar?
Of course, there is no yes/no answer to that, but property experts from Zoopla are quick to remind investors that property is a long-term investment, so they need to take a long-term view. Average house prices today are about 22 percent higher than in 2008 and an incredible 240 percent higher than 1998.
There will inevitably be bumps along the way. London has seen some in 2018, and there will be more to follow, but while nothing is guaranteed, property represents one of the best long-term investments you can choose.
Investors are naturally cautious about the capital right now, but other areas have seen continued growth and success over the past year. Manchester, Liverpool and Edinburgh have all seen prices continue to soar, and cities like Newcastle and Preston are showing signs of following suit in the year ahead.
As with any investment, it is important to go into it with a clear strategy. So think about your target tenants, and from there, search for the perfect property through their eyes. Cities with a large university population or bedroom communities with good transport links into commercial hubs are always good targets.
In a Financial Times article published in October, Judith Evans said: “the unknowns surrounding Brexit are weighing on the property market.” The fact that a Brexit deal now looks like being a step closer has caused a mass exhalation of relief in the property sector. Of course, there are still points to be agreed, but the broadly held view is that while Brexit might cause a short-term drop in prices, the long-term impact on the property market is likely to be insignificant.
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