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How to Survive a Property Market Crash



‘When is the property market going to crash?!' If I had a pound for every time a client asked this I’d be a rich women. The short answer is - I don’t know. The long answer is – nobody knows and there are so many factors at play it’s very difficult to predict.


I understand the anxiety around the property market. Most of us are old enough to remember the stock market crash of 2008 which was closely followed by a plummeting property market with house prices dropping and the market coming to a halt. It was an extremely difficult time for everyone as homeowners were trapped in properties they could no longer afford to sell and home seekers weren’t able to get the loan needed to move. For many it was an eye-opener that even property, the ‘safest’ investment available has no guarantees.



After a global pandemic, most people were expecting the property market to crash but the UK government introduced a stamp duty holiday and lo and behold property prices rose. Since then we’ve seen unprecedented interest rate rises but with the current stock so low and demand for new homes so high, house prices continue to rise. So the question on everyone’s minds is when will we see house prices drop?


Unfortunately we don’t have a crystal ball but that doesn’t mean you can’t prepare yourself for an unpredictable market.


 

Dani’s top tips


  1. Don’t buy a property that is at the top end of your budget. If property prices do go down and your equity decreases within the property you could find yourself paying a lot more on your monthly repayments.

  2. Don’t buy a property assuming you’ll definitely be able to sell for a profit in a couple of years. Property usually wins as a long term investment but anything can happen in the short term, there are no guarantees.

  3. Buy a property that you can add value to. More often than not, a property requiring renovations will be under market value, which gives you a great advantage once you do complete renovations. Even if house prices go down you will have a buffer that comes from having increased the property value


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