Partner Article

Don’t gamble on a rise in property value

That the Lib Dems have warned of a housing bubble shouldn’t be a surprise to anyone – given the chance they’d tax the owners of any remotely valuable dwelling, so the concept of the population growing wealthier from the property market no doubt makes them splutter.

There is an argument to be made that property prices in some areas are approaching ‘heated’ status, if not yet bubble-like.

However, the description of bubble can only be applied to some very localised areas; whole regions of the UK, like Northern Ireland, Scotland and Wales display anything but these characteristics. Should then a buyer jump in now to purchase their home for fear of missing out later? That depends – prices won’t stay depressed in these regions forever, and as a very rich old developer once told me, ‘whatever you pay now for a property will always seem like a bargain twenty years down the line!’.

But that can be used to justify all kinds of crazy purchases, so anyone considering making the leap to homeowner should examine the variables carefully.

Interest rates will of course rise at some stage – the consensus is that we have 3 years at the outside before they start to rise again; whether they creep up incrementally or jump quickly only a crystal ball will tell.

There will probably always be a shortage of houses built in the UK, but then again that fact has never prevented market crashes before.

So is there still room in the market for profit? Almost certainly – rates aren’t rising immediately, prices haven’t reached their peak (especially regionally) and there are, most likely, more gains to come.

But I think we’re on the home straight now when it comes to price speculation, with the finish line not far up the road, so the best advice is to buy because you need to move or because you want a home, not because you want to gamble on a rise in value.

This was posted in Bdaily's Members' News section by Declan Curran Founder of HomeFix Direct .