Alan Cleary

Still plenty of opportunities out there for property investors

The past month has been a bit of a rollercoaster for headlines in the property press.

Rightmove's index – which tracks asking prices – showed a monthly rise of 0.7% for newly marketed properties, a relatively healthy figure and in line with previous September figures going back to 2011. The index's authors noted that the national annual rate of increase remains subdued at 1.2%, but there are some positive signs for the autumn market in regions where affordability and sentiment are good. They also acknowledged that stretched buyer affordability or negative market sentiment in other regions is limiting price growth. 

We've also had figures from the ONS showing that average house prices on completed sales in the UK have increased by 3.1% in the year to July 2018, down slightly on the 3.2% recorded in June 2018.

So, it came as a surprise for many when the papers reported that Mark Carney, governor of the Bank of England, had warned that house prices could fall by a third if the government can't agree a deal with Europe over Britain's exit from the EU in March next year. 

In fact, that's not quite what he said. I believe that in describing the worst-case scenarios for stress-testing affordability on mortgages, Mr Carney suggested that banks and building societies might consider stressing affordability in the event that property prices were to collapse by a third. He was, sensibly, describing an Armageddon scenario that he does not believe is likely to materialise – even if Britain crashes out of the EU next year. If we learned anything from the last crash in the economy, it is to expect and anticipate the unexpected. 

However, the unhappy truth is that Mr Carney's comments, taken out of context, made for a great shock headline. And buyers and sellers read those headlines and it will influence both confidence and appetite to buy and sell property. 

While the Bank of England is right to ensure financial institutions are prepared for a downturn, thus protecting customers, there is a danger that it has talked down a market that is already subdued. I won't debate the wisdom of this, but it highlights a real opportunity for property investors who understand the value of adding value.  

There is still plenty of appetite for well-priced property and following the exit of several thousand amateur buy-to-let investors, there are bargains to be found – particularly for those looking to expand larger portfolios held within limited companies and who are prepared to do some refurbishment work before letting. 

Markets are cyclical and anyone in property knows that – and knows how to deal with it. Luckily for them, there are also lenders in the market with appetite to fund those deals. Even in light of uncertainty over Brexit, British people still need somewhere to live.  

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