When is the best time to buy Property?

In the ever-evolving realm of Property investment, the question invariably arises: "Is it always a good time to buy?" This query often stems from a place of skepticism, fuelled by the notion that property professionals seem to advocate for investment, irrespective of the ebbs and flows within the market. After all, it's easy to assume that such encouragement primarily serves the interests of those who facilitate property transactions.

However, the reality of Property investment is nuanced, far removed from a simplistic "always good" or "always bad" dichotomy. To discern the true wisdom of when to buy, it's essential to delve into the intricacies of property markets, exploring the factors that influence their dynamics. 

In this exploration, we aim to explain the art of timing in Property investment, offering four compelling reasons why, more often than not, it indeed proves to be a good time to make your move. These insights transcend the conventional wisdom of market timing and encompass a holistic approach to investment strategy.

So, let's dispel the myths, navigate the cycles, and uncover why, in the world of Property, the right timing is not just a matter of chance but a calculated choice.

1. Few Truly Bad Times

The reality is, there are better and worse times to invest in Property, but rarely are there outright bad times. The only instance where it's unequivocally a bad time is during the peak of a property bubble that precedes a market crash. Fortunately, these bubbles tend to occur infrequently, usually once every 18 years.

However, recognising a bubble is subjective and can vary from person to person. Some may argue we haven't experienced one yet, while others may disagree. Regardless, this bubble phase is typically brief, leaving a substantial window for savvy investors to make their moves.

Within the remaining 16 years of the property cycle, there are opportune moments (like after a market crash when prices hit rock bottom) and more challenging times (such as the highly competitive market of mid-2021 to mid-2022), but not necessarily bad times to invest.

2. Regional Opportunities

Property markets aren't uniform across the board. What's happening in one area may differ drastically from another. Hence, it's often a good time to buy somewhere, even if it might not be ideal in your current location. Being open to exploring different regions can keep you in a perpetual state of readiness for favourable investment opportunities.

For example, while 2013-2016 presented a great buying opportunity in the South East, the following years saw challenges in London. Yet, there were clear investment prospects in Manchester and the North West. As the property cycle progresses, other regions come into play. Remaining flexible about your investment location allows you to capitalise on these shifts.

3. Consistency Trumps Perfect Timing

Waiting for the perfect moment can lead to inertia and procrastination. Many potential investors delay their entry into the market, missing out on valuable opportunities for growth. A consistent investment approach encourages action, turning your financial goals into concrete steps and reducing the risk of missing out on favourable market conditions.

Ideally, buying aggressively in the first few years after a market crash and then waiting for extended periods without making new investments is a good strategy. However, very few investors can, or do, adhere to this approach.

On the flip side, waiting for a perfectly clear investment horizon rarely occurs and often coincides with a market bubble. Therefore, the key is to find a balance. Buying what you can when you can, while not trying to time the market perfectly, can lead to significant returns over time.

Consistency builds financial discipline and cultivates good financial habits. It encourages saving, budgeting, and responsible financial planning. These skills are transferable and valuable for achieving various financial goals, not just in Property investment.

Consider this: If you bought one property each year from 1990 to 2009, a period encompassing two major downturns, your early investments may have initially lost value. Still, over the long term, your total equity gain by 2019 would have been £988,000. Holding these properties for another decade would have grown your equity to £2.3 million, highlighting the power of consistency over time.

4. Long-Term Perspective

If your Property strategy involves flipping properties or adding value through renovations and refinancing, timing is crucial, and there are periods when this approach might not be feasible. However, for those with a long-term investment horizon of 20 years or more, timing becomes less critical.

In such cases, inflation can work in your favour, increasing the value of your portfolio while your debt remains relatively stable. The precise moment at which you entered the market becomes less significant as you benefit from the natural growth of your investments over time.

While the Property market undoubtedly experiences fluctuations, it's not always a matter of good or bad times to buy. Instead, it's about finding the right opportunities, being adaptable, maintaining consistency, and keeping a long-term perspective that ultimately leads to success in the world of Property investment.

Looking back over the years, property markets have displayed a remarkable resilience to the test of time. Graphs and charts mapping property values often resemble a steadily ascending staircase, punctuated by occasional plateaus. Take, for example, the aftermath of the 2008 financial crisis, a period of turbulence that left many investors wary. What history reveals, however, is that property values rebounded, often surpassing their pre-crisis levels.

If you are looking to start investing in property or take your investments to the next level please get in touch with us to see how we can help you on 01684 368468