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241: This week could be the best time to buy in the UK for 25 years


12-08-2008

PropertyInvesting.net team

 

As our regular visitors will have picked up over the years, we believe the best time to buy in the UK year is the first week of December – why?

 

 

Hence very little competition and very motivated sellers.

 

Added to this, these exceptional circumstances that mean less competition:

 

 

Added to these, some fear factors:

 

 

Added to these positive factors:

 

 

Thence one might form the view that this week is the best time in 25 years for investors to buy property - at bargain basement prices.

 

The Doubting Thomas’s will say – prices are forecast to drop another 10 to 15% or more. To which we say – when was a forecast ever correct? Who forecast a recession in the UK in April 2008? Who forecast interest rates dropping from 5.75% in 2008 to 2% or lower by year end? Who forecast oil prices crashing from $147/bbl to $40/bbl within the last five months?

 

Okay – if you buy property now you, it might be that property prices slide a further 10% by end 2009 or more. But if you buy property now, you may be able to pick up a distressed sale that could knock up to 25% off the sale price – particularly if you buy at auction or you buy cash and can close within a few weeks.

   

Are we buying now? No – because we haven’t got enough liquid cash to take advantage unfortunately. We’d rather reduce our risks by waiting a bit longer – seeing a clear bottom then jumping in again. But we fear that by the time we’ve seen the bottom, it will be too late and everyone will be jumping back in and the competition will have hot up!

 

It’s just we have this feeling that with interest rates at 2%, as soon as banks start lending again, their could be a lot of pent up demand after about 1½ years of the market being in the doldrums – there is definitely a scenario that a very fast recovery could occur. No – this is not mainstream. Since when did mainstream make money anyway?

 

In London – a few other things come together:

 

 

Plus, the lower Pound Sterling value should start driving growth in a few months time as exports increase, London tourism stays robust assisted by lower oil prices and lower air fares. Or at least prevent a major prolonged recession. Do not be surprized to see the beginning of a recovery in February 2009 - with 1% interest rates, $50/bbl oil, inflation at 1% and stock markets recovering. 

 

And don't forget, if you are the only investor active in town, why would you take the risk of further house price falls next year - the only reason would be your offer is 25% below asking price - hence reduces your risks to a minimum. And yes - property prices have been over-inflated from easy loans - times have changed. 

 

So we encourage you to challenge yourselves as to why you would not buy when it looks particularly bleak – just as one should be considering selling when euphoria takes over. Buy when there is the maximum depression around – and we can’t think of a better time than just before the Christmas parties start and everyone is looking forward to a major recession and unemployment. And the miserable cold weather helps even more – can you imagine bumping into competition on a rainy dark windy 4pm afternoon walking the streets looking for a bargain?

 

Happy Hunting

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