I am sure you will have read in the news recently about the current status of the property market. Its hard to miss a day without a headline suggesting that the property market if currently very buoyant. This is being driven largely by government initiatives to stimulate the market and related economies.
I recently read that on average, property sellers are agreeing 98% of a their asking price which means prices are now being pushed to the highest level on record. Sales agreed are also at a 13 year all time high!
All of this sounds fantastic if you are in the market to sell your property but what does it mean for property investors? Are we now being pushed out of the market because prices and competition are too high?
I don’t believe this to be the case. Like with any industry, as the market evolves, your business needs to evolve with it. You might now find yourself fighting over properties with other investors or residents to secure the deal that you previously would not have. However, there are still many opportunities for those investors who are prepared to adapt their approach.
With sales agreed now at a 13 year high, it probably doesn’t surprise you that fall throughs are also at an all time high. This has historically been around 1/3 of all property transactions. The reasons for this could be a multitude of things including finance issues, job losses, down valuations, timescales overrunning etc. All of these factors present opportunities for investors who are positioned to move quickly.
We are continuing to expand our portfolio along with many of our clients as we are continuing to find good deals in the market. There is a school of thought that would suggest, hold fire and wait for the market to crash then buy again. This will likely mean putting your business on hold for the next 18-24 months. However, if a lot of investors take this approach, the competition for properties has reduced and better deals will start to emerge for those that persist.
Whilst we are in uncertain times economically, we do need to carry out extra due diligence on property deals but dont feel like they no longer exist. The headlines will do their best to convey a picture of disaster but that helps them to sell papers! We are continuing our conversations with property owners and agents to search for the opportunities that still exist