The elephant in the room at the moment is what impact will COVID-19 have on the economy and the property market.
That is the question all property investors, and those thinking of investing, have on their mind at the moment. What is important to keep in mind is that there has been zero impact on property values so far, and it is simply speculation as to what the impact might be.
In our view, property investment is about time in the market, rather than timing the market. One reason for this is that the latter is very difficult to predict. Aside from that property is a long-term investment. If you are buying desirable property in good locations, where there is strong demand and significant reasons for people to want or need to live there, then there will continue to be demand for your properties, regardless of the economic cycle.
The worst possible thing you can do is to listen to the media. For example, think back to 2007, when just before the last major financial crisis the media and the masses were saying that it was the best possible time to buy, and the property market was never going to go down in value, or ever stop it’s significant run. If you had listened to that you would have bought at the worst possible time. Then two years later, in 2009, when the market started to turn positive, everybody was depressed, it was the worst possible time to buy, “you’ll never make money from Property”, but that was actually the best possible time to buy.
So, completely ignore the media and invest based upon long-term fundamentals, opposed to short-term uncertainties. There will always be reasons not to invest, we had Brexit, then we had the election, and then we had Easter, and then we had Christmas. The moral to the story here is that property investment is always daunting. It’s a large amount of money and you want to invest with as much confidence as you possibly can, but there is strong evidence to suggest that it is not about trying to time the market, and certainly not about following the masses, or the media.
The fundamentals of the UK economy and the UK property market are strong, nothing has changed in that regard. If you are buying desirable property, in good locations, they will rent well, and if you can retain them long-term, they will grow in value.
We meet with far too many people later in their lives, who have earned respectable salaries, but have a waited for the ‘perfect’ time to invest, which surprise surprise does not exist.
Therefore, these people either sat on their money, or put it in the bank at a low return; and in most cases found it very difficult to meet their retirement goals.
In the words of Warren Buffett; ‘be fearful when others are greedy and be greedy only when others are fearful’.