Why You Wouldn’t Buy a UK Property Right Now?

We are all aware that a property is one of the most important investments that you can ever make. Whether intended as a long-term asset or simply as an upgrade to your current living conditions, this market attracts millions of buyers each and ever year. However, we also need to keep in mind that making the right decision requires a good deal of clarity and foresight. Anyone who recalls the financial crash of 2008 and the subsequent housing crisis is well aware that things do not always go as planned. Much like other marketplaces, the housing market tends to follow specific cycles and we are currently in the midst of what can only be called the cusp of a bearish time period. This is why 2020 could very well represent one of the worst times to buy in recent history, particularly in the UK property market.

Let us take a look at some of the fundamental principles behind this observation so that realistic conclusions can be drawn.

A Look at the Current State of Play

The Role of Economic Growth

  • The ever-present shadow of the Brexit.
  • Relatively low levels of consumer confidence.
  • The recent COVID-19 pandemic (more on this later).
  • Flagging domestic productivity.

We need to keep in mind that one of the main drivers of property values can be seen in GDP. So, it is only reasonable to assume that slower domestic growth will inevitably impact the cost of a home. To put it simply, the current housing market is overpriced when compared to other fiscal indicators within the United Kingdom. Those who buy now (at the wrong price) risk purchasing an asset that is worth more on paper than its actual price, and they know it.

Following Buyer Behaviour

Furthermore, the average age of a first-time home buyer in the United Kingdom is 32 years. Why is this factor important and relevant to the UK property market? We need to keep in mind that their decision-making processes are much more dictated by online research and virtual property portals when compared to previous generations. Additionally, younger generations often view a property as an investment opportunity as opposed to a home that they will live in for the remainder of their lives. In other words, they are just as concerned about future prices as they are about present values. It is therefore no surprise that these very same individuals have become somewhat concerned about recent events. This brings us to what can only be called the proverbial elephant in the room.

The Dynamics of Unpredictable Times

  • When will individuals be allowed to return to work?
  • How will the COVID-19 outbreak impact housing prices?
  • Will the current lockdown measures delay a potential sale for months to come?
  • Once restrictions begin to ease, how bad of a hit will the domestic economy have taken?

Much like a sailing vessel encountering an unavoidable storm upon the horizon, now is the time to batten down the hatches as opposed to foundering upon the open seas. It is therefore completely understandable why now might not be the best time to consider a property investment.

However, we need to finally mention a maxim that was highlighted at the beginning of this article. The property markets are cyclical in nature. Uncertainly and stagnation will inevitably be replaced by a sense of optimism and a more bullish climate. This is why patience or significant negotiation skills with motivated sellers are arguably the best virtues to possess at the moment. Until things become clearer, it is likely that prudence will supersede a more proactive attitude. As the age-old expression goes, this too shall pass.

Make sure to seek expert advice if you are entering into the UK property market or expanding your current portfolio.


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Mike Coady is an award-winning financial expert and a well-known leader in the financial industry.

In addition, Mike is a well known Independent Financial Adviser and Money Coach. Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Fellow of the Institute of Sales Management (FISM), a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.

Blog published by Mike Coady.

CEO of Coady Performance Group, based in Dubai — UAE. https://www.coadyperformance.group/