We live in uncertain times. Brexit, tax and lending rule changes affect everything to do with the property market.
But many people still believe that the property is still a viable investment, but are they right?
Today at Propertyroad.co.uk we deep dive into this byzantine industry and weigh up the pros and cons of investing in property for oneself.
To buy or to rent?
It’s difficult to decide whether to buy or rent a property. You may be the kind of person that enjoys moving around and change location and property type.
After all, Britain is a very transient society; sourcingfocus.com reported that 37% of people would be willing to move away in search of better career prospects.
If you yourself identify as a corporate go-getter then renting may be your best available option.
You may also be in a new relationship that may come to an end. There are few things more complicated than splitting a property after a break-up.
But if you decide to own your own property then you gain some amount of individual freedom. You decide who lives there, what pets you have and how and when to decorate.
When buying you generally have to go to a bank or a building society and give details on your situation. This is a painful process but it is better to learn your economic reality. The costs and limitations are there in black and white.
One of the major difficulties is getting together the deposit for the property. Most people’s money goes on rent each month so it’s hard to save thousands of pounds for a deposit.
But it is also possible that you may not be buying a property for you to live in.
Many people with a suitable bank balance go down the “buy to let” route and typically try and snag a bargain at property auctions, but property pundits agree that auctions themselves are not for the inexperienced or faint of heart. This means that the property may become part of a financial or investment career.
Some people will also look to buy and then sell soon after in an attempt to raise fast cash. In these circumstances, one must be aware of the fluctuations of the property market.
But there are no guarantees. If you live in your property long term, its value may skyrocket. But what happens after everything has been paid off?
Location, Location, Location
Whilst it has become an overused adage (and a daytime TV show hosted by Kirsty Alsop), the term ‘location, location, location’ aka where your property will be situated is of paramount importance in the modern market.
If you have the cash, you may buy a house in the South in an area like London. You may live or work in the capital but as you get older, could look to move elsewhere.
The property you own should keep its value and you could sell up and head up north where you can buy bigger and cheaper.
And whilst these are all ‘ifs’ and ‘buts’, there is still a certain amount of secure ground an investor can get when they invest in an area which should hold or increase its value in the coming years.
In the South London example above, it can be deduced by the ever-expanding population of London and continued investment in the area despite political certainty that property here would have some immunity to extenuating economic circumstances.
Does property investment have a downside? Well yes, interest rates may fluctuate, making it harder to pay when they go up. Employment stability may become an issue, leaving you with a stressful day-to-day life.
There is also the very real possibility of repossession. If you fall behind in your mortgage payments then the bank or building society could take the house. It’s rare but affects tens of thousands of properties each year.