In an era marked by diminishing mortgage rates and escalating developer stock values, the signs of positivity permeating the market are hard to ignore. While my involvement in the property sales business might imply a predisposition towards optimism within the property industry, my belief in the perennial viability of property investment stems from a strategic approach aligned with market sentiments and a commitment to medium to long-term goals.
Anticipating that "golden" moment to seize discounted prime residential properties with a potential for 15%+ yields and substantial short-term capital growth is often an elusive endeavour. For many, especially those not immersed in the daily dynamics of the property market, recognising the shift back to a bullish market may come too late, missing those valuable opportunities that are staring you in the face.
Throughout my extensive 37-year tenure in the property industry, one enduring truth remains: banks and lenders seldom dispense money at interest rate levels unless they are overwhelmingly confident in both financial gains and risk mitigation (a point you should bookmark for later in this post). Similarly, the surge in stock values within an industry deemed precarious suggests a compelling reason behind the upward trajectory. While unforeseen events like wars, acts of nature, or even dare I say it, global pandemics can disrupt projections, relying on the expertise of those investing their own resources and scrutinizing daily reports becomes imperative.
Observing the decline in fixed interest rates, now being offered at 4.25% from a summer high of well over 6%, has consistently served as a reliable indicator of the market's trajectory.. Banks and lenders knowingly endure short-term losses by offering these reduced mortgage rates, anticipating substantial gains over the medium to long term. It's a calculated risk that, in my experience, rarely falters.
An so, the wisdom behind my request of bookmarking this juncture lies in understanding that the initial short-term loss for lenders paves the way for considerable profits in the future. So when presented with a property investment boasting just a 4 or 5% rental yield, it's crucial not to dismiss it . Instead, carefully consider the rationale behind the proposal being given, consider the experience of the person giving you that rationale. Like embarking on a business venture, acknowledge that lower yields in the shorter term and in some cases, even the losses are just part of the overall journey, but if the proposal aligns with the right criteria—it's discounted from market value, it is unique, in a regeneration area, and coinciding with declining interest rates and rising stocks—trust in the broader, more lucrative picture because history tells us this is where that golden moment is more than likely to be hiding.
If you would like a full impartial review of your property investment strategy then please do not hesitate to get in touch, even if it is just to get our opinion on proposals that are not even offered by us or even about your exiting property investments. We love to discuss anything about property regardless of any financial gain and we can be reach on email at info@cityandcountrywide, on WhatsApp or, you can call us on +44(0)208 144 6222
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