Falling Rates: Dr. T Explains Why Now is the Time to Invest in UK Property
I’ve been providing thousands of people with investment properties in the UK for nearly 20 years, and I can confidently say that now is one of those ‘ideal times to invest’. Let me explain why.
Interest Rates are Coming Down
Inflation has continued to drop, which means the Bank of England continues to move interest rates down. Many analysts believe interest rates are likely to fall from the highs of 5% last year to around 2% by the end of next year.
A trade deal with the US has provided further confidence that inflation will be kept under control, now that the threat of Trump’s tariffs has passed.
UK Property Has Been Resilient
UK Property prices have continued to rise gradually, through recent times of:
- High inflation & interest rates
- Cost of living crisis
- Energy cost crisis
- Global Stock Market Volatility
- Political Uncertainty
- Increased Legislation for Landlords
But why have prices still gone up? 2 very good reasons:
1. Housing Supply is Limited
Everyone knows that housing supply in the UK is limited. Even if the Government meets its new house building targets (which it won’t), the demand will still outstrip supply.
2. Rental Demand is Increasing
Due to the same reasons, demand for rental property is the highest it has even been, and rents continue to rise.
These 2 factors won’t change any time soon. Supply will remain limited and rental demand will keep increasing.
Everyone knows that housing supply in the UK is limited. Even if the Government meets its new house building targets (which it won’t), the demand will still outstrip supply.
Property is Better – Now More than Ever
Lower interest rates are bad news for savers, and global politics can affect paper investments for the next few years.
Cash Savings are Not Effective
Because interest rates are coming back to normal levels, investments based on cash savings and deposits give zero capital growth, with low interest income. Money in the bank makes you poorer, and soon, will barely cover inflation.
Shares, Funds and Paper Investments are Volatile
Until the end of President Trump’s term, the market for higher risk “paper” investments is uncertain and is likely to be volatile. This makes it unsuitable for long-term investment or pension type income.
We recently saw a big global sell-off in all major stock markets due to the tariffs. People who got scared and ‘sold the bottom’ saw an average portfolio loss of 20% – 25%. During this period of volatility, property prices in the UK continued their steady climb.
So, What Next for UK Property Prices?
With borrowing set to become cheaper over the next 12 – 18 months, demand from buyers will increase.
Given that UK property prices have been going up all this time, it is very likely prices are going to increase further and more quickly, as interest rates come down.
Why Now Is the Time
How much prices increase by and how quickly isn’t certain – nobody can tell you that. What I can say is I believe very strongly that it’s worth investing now or in the very near future – ahead of the crowd and before the full impact of cheaper borrowing hits the market over the next 1 – 2 years.
Here at Find UK Property, we are increasing our prices in Q3 in line with the market. This is something we review on a regular basis, so we can continue to deliver value whilst remaining competitive against all other investment products.
Our clients can lock into our old pricing simply by reserving in this calendar quarter. Beyond that, I think the next 24 months will see our prices increase further and more frequently.
