A property finance expert is telling buyers to sit on their hands and not commit to purchases - as he believes today’s price bubble will burst.
Mark Hughes, a specialist mortgage advisor focusing on residential property at Pure Property Finance, says purchasers should wait until “we’re out of the current property price bubble.”
He adds: “I think it’s best that people avoid investing in property right now, especially if it’s a property that they don’t see as their forever home and they’ll want to sell in a few years. We’re currently in, what I think, is a property price bubble.
“There has been a huge increase in house demand fuelled by a number of factors; people being able to save more towards their house deposit with the lack of commuting, people wanting to move closer to be with their families, people wanting more office space in their home, etc.”
“Until the property market settles down, the best thing to do would be to make smaller renovations on a current property. If there’s any way that you can add in office space to your spare bedroom, then do that, or if you’re sick of the sight of your living room from spending too much time there, then perhaps upgrade it with some new furniture.
“This may also add value if you do still decide to sell your property in a couple of months.”
He says there is a lesson to be learned from what’s happened in China, where one of the country’s leading property companies has just defaulted on payments on a debt of over £220 billion, leading to fears it could trigger a global house price crash similar to that in the global financial crisis 2008.
Hughes says: “Nobody can predict the exact movements of 2022 in terms of the housing market, but I think it’s fair to say that if you’re currently in a home where you’re safe and financially stable, not to move just yet.
“For those moving up the property ladder, their next purchase is likely to be more expensive than their previous property, meaning more finance is needed and, in this situation, the only people that will win are the mortgage companies.
“Potentially, if you hold off selling for a few more months, you may get a few more thousands of pounds for your property, as well as the property market being more predictable.”
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They label any fool an expert these days
What's wrong with what he says if you know better?
I'm happy to be an expert fool... here's another tack, "An expert says that the shortage of housing stock is likely to continue into 2022; the best option for those planning a move is to do so now before the market prices surge another 5% over the next six months"
This guys appears even to have contradicted himself, as he finishes:
“Potentially, if you hold off selling for a few more months, you may get a few more thousands of pounds for your property, as well as the property market being more predictable.”
well in that case, ''potentially'' (unless downsizing) the next property will cost thousands of pounds more - no?
This can only impact the UK if it impacts China medium term. For example if cheap money runs out and China start normalizing the true value of its currency. Given that China is a controlled market who relies more on ego than actuals, this is about as likely as the sky falling on Mark Hughes head.
The UK is in finance terms linked to the sways and deviations of the world but the world plays by different rules than we do. It is good that we have increased base rate to give the UK some wriggle room and it needs to be around 1.25% or 1.5% to allow for debt repayments to be more comfortable.
In my humble opinion I think we will still see property increases and given incomes are rising along with inflation its a healthy balance. New builds are overpriced considering the quality though.
the best time to buy property was twenty years ago, the second best time is now!
What nonsense. Supply is a huge issue and until there is over-supply house prices will continue to rise.
exactly
In the real world outside estate agency people can see that prices have boomed to an extent that they have not done since the late eighties (unless you have been living in London of course). Whilst many of the factors that were present then are not present now, the one that is present is cost. Supply was an issue then just as it is now (it has been an issue since the 1947 T&CPA restricted building) and I shall be be very surprised if we don't see a fall of around 10% starting later next year after a pregnant pause in transactions. But it sounds as though I'm the only one thinking this so I'll probably be proved wrong!
Happy Christmas to us all!
Shame about the contradiction in the closing paragraph which I hope means he doesn’t have to spend the festive period getting the splinters out of his backside from sitting on the fence.
For what it’s worth, I don’t see values continuing as they have under a Government fuelled recent period but supply and demand and the likelihood of low cost borrowing do not suggest to me the bursting of any bubble.
Trying to time the market is a mugs game, the wobbly line always goes up, changes direction far quicker than anyone can react, and is influenced by a so many unpredictable external factors, herding cats is easier.
I am still waiting to find the person who in 2020 predicted that house prices would not actually drop by an apocalyptic 20% as most did during the pandemic but increase by 15% instead. I wonder how many tens of thousands of buyers waited too long listening to all the experts then. The only right time to buy is when you want to.
As my great former MD used to say, “there’s no such thing as too expensive. Only too soon. “
Agree with the majority of the posts, if you rent currently and can afford to buy, then do it right now, the supply of properties is not going to increase enough for there to be a glut and for prices to start to drop, i agree they may not go up as much as we have seen but they are still on the rise and will be for years to come. If you do rent now then the rent you pay will still be increasing...... so how worse off will you really be if you buy and intend to stay there ?
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