Aug 21, 2020 ◀ Back to All Videos market commentary

What Next For The UK Property Market?

We’re supposed to be in the biggest recession ever, yet property prices are going up?! In this video, Ranjan breaks it all down for you.

  • What’s going on with UK property prices in a recession?
  • Ranjan’s FIVE golden rules for understanding how property prices behave over time
  • What should property investors focus on now to stay ahead?

Property Prices in a Recession: What’s Going On?

It's official. We are in a recession here in the UK and it’s the deepest of any major economy. But why does everything feel so good? Folks are on furlough by day, but by night are happy to pack out bars and restaurants for their state funded chicken and chips. 

There have been bounce back loans, state grants, VAT deferment and more. Add this to the Stamp Duty waiver and the pent-up demand from the Covid-19 lock-down, it’s easy to understand why there is a mini property boom right now. The UK economy is on six cans of Red Bull and an incredible sugar-rush high. 

The economy is pumped-up right now but next year that high will be a low. People will be coming off furlough, Government loans will need repaying and tax breaks will come to an end. We will see more unemployment with layoffs, as well as more business failures, and the Government will find it difficult to make us feel that all is well.

But the banks won’t be fooled by this Red Bull high, they have been dropping their LTV’s (Loan To Value) on property loans from Pre-Covid levels. You ask why? Because they aren’t expecting property prices to hold up.

So what about property investors and people with property businesses? That brings us onto Ranjan’s Five All-Time Golden Rules For Understanding How Property Prices Behave Over Time.


FIVE Golden Rules For Understanding How Property Prices Behave Over Time

  •  After a period of boom, prices will ALWAYS crash
  • After a crash, prices will ALWAYS boom 
  • You cannot time the market. 
  • Buy well to MITIGATE that you will never get market timing right
  • Be like Mr Spock - Take emotion out and don’t get greedy.

So What Should Investors Focus On Now To Stay Ahead?

Create your own economy based on what you do, rather than depending on what the economy does unto you. We all know that fortunes are made in a recession. In real estate, fortunes are made by buying distressed assets and adding significant value to them. That’s something that is in your power and not dependent on the wider economy.

As badly run businesses fail, there will be more and more commercial properties coming on to the market… and now we have oodles of new permitted development rights being introduced which allow commercial buildings to be repurposed to alternative uses - even better! The planning system is going through a massive change, making it easier for savvy investors in the know, to re-purpose defunct commercial buildings without unnecessary red tape, adding significant capital value. The skill will be in knowing how to identify those rough diamond commercial properties by quickly spotting their re-purposing potential and how to avoid those commercial properties which you can’t do anything with.


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