Recent figures have shown that property prices in the UK are beginning to slow.
For the fourth consecutive quarter, prices have fallen, this time by 0.2%. This represents the first fall in prices for four consecutive periods since 2012. However, the news is brighter on an annual front, with a rise of 2.1% for the year as a whole.
Nevertheless, it’s not a great time for property investors in the UK and with the current financial outlook as it stands.
It’s long been speculated that prices have been artificially high for some time now, and the market has been due a “correction”. While this might be a correction in terms of economic policy, it will undoubtedly cause a huge amount of concern for those who may lose money in the process.
Surviving The Economic Changes
There are a lot of economic changes afoot. There are various reasons for this, but no reason in the world can change the fact that it’s tough for investors to know where they stand.
One big concern is the fact that wages are still stagnating, meaning that landlords may struggle for tenants who can afford their existing prices.
There are options for a way around this concern, however. The so-called sharing economy continues to flourish, and many investors now finding that renting by using easy Airbnb management services is providing a lucrative income stream without the trouble that long-term tenants can bring.
It would be wise for anyone investing in property to consider their pricing strategy if they choose to rent their property out. A lower price that is paid consistently is, after all, a higher monthly price that no one is willing to pay.
It’s Not All Doom and Gloom
Thankfully, there is some good news for property investors. Interest rates have been at the low level of 0.25% for over a year, meaning that borrowing to pay a buy-to-let mortgage is still incredibly affordable. If you do own a property with a mortgage, it’s worth looking at what deals might be available to ensure you’re paying the lowest price possible – a saving that you can then pass on to potential renters.
There was some speculation in June and July that interest rates would have to rise to counter inflation concerns. With recent inflation figures actually lower than was predicted, an interest rate hike doesn’t seem to be on the rise any time soon.
This is good news for property investors, providing a useful counter to concerns about property prices.
Predicting The Future
The above, of course, is absolutely impossible. Even near-recent predictions about what will happen with the economy have been off the mark, so it’s a difficult time for investors to know where to look to.
Many a keen eye will be being kept on the next set of house price figures, which may potentially benefit from a summer bump.
If you are a property investor, then now is perhaps the moment to bide your time rather than look for future investments. Look at different revenue streams for your property if it goes unoccupied for a time, and see how the economy plays out over the next few months.
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