Hello readers,

It’s been a busy couple of weeks, and I’m delighted to announce that I have recently passed my final ARLA Level 3 Qualification Award in Residential Letting & Property Management and will soon be starting the level four qualification for company directors.

This is a great achievement and something I’m immensely proud of as I continue to drive forward the quality of service Home Share Lettings provides!

As we look at the current property market, you’ve undoubtedly read the news headlines as inflation hit a 40 year high at 9%. A few that stood out to me read ‘UK inflation hits 40-year high of 9% as energy bills soar’ and ‘Inflation hits 40-year high of 9% amid cost of living crisis’.

However, what do the headlines read when it comes to the property market? Three that have stood out for me are: ‘There won’t be a house price crash, but beware a buy-to-let dip’, ‘Incredible reason why house prices WON’T crash this year – ‘didn’t see that coming’’ and ‘Threat grows of UK housing market slowdown’.

Ok, so these are, on the whole, relatively positive headlines right? Well… I was shocked to read that the Telegraph preceded the headline about there being a buy-to-let dip but no house price crash with a headline that read ‘Don’t be surprised if house prices drop 20pc’. This headline about house prices dropping was released THREE DAYS before they said there won’t be a crash.

I think this just goes to demonstrate the danger of reading too much into what’s written in the press rather than having a firm understanding of not just the market itself, but the historical trends. A good example of this is an article that I read which highlights how Knight Frank is highlighting a risk that the property market may end up talking itself into a recession.

So… there you go! The jury is out on what will happen over the coming 6 – 12 months, however just as we thought we were ok coming out of the pandemic, it looks like we’re not in the clear yet.

When it comes to whether there will be a housing market crash, it’s important to cast your mind back to the start of the pandemic and recall the headlines that predicted such doom and gloom however EXACTLY the opposite happened, and house prices went wild.

I’ve found Knight Frank’s outlook to be the most balanced and extremely helpful. Their analysis is how the double-digit house price growth is likely to slow to single digits, but a recession not causing a big dip.

Economists do, overall, seem to be predicting a slowdown rather than a dip or crash. Overall, this is underpinned by the fact that demand remains higher than the five-year average, usual whilst supply remains lower. This continues to drive up prices (for now).

So where does the Telegraph’s headline predicting a buy to let dip leave us? When it comes to this, it’s helpful to remember how the government is aiming to make owner-occupation even more attractive.

Certainly, a growing number of landlords I speak with are starting to think twice when it comes to buying an investment property. Not only with the sky-high prices, potential changing legislation and forthcoming requirement for accreditation but also the general uncertainty are all feeding into a squeeze on new buy-to-let purchases.

Here’s the question however… with tenant demand remaining high and fewer landlords willing to invest what will the impact be? Surely that will fuel demand, push up prices even more and lead to further challenges..?

Let’s loop back to a recession and conclude with a big ‘what if’. Ok, so it’s probably unlikely we will see a crisis in the same was as 2008 (although not entirely impossible) but what could the impact be? Well, look at the graph below which outlines how house price declines do typically coincide with recessions. This is really interesting! So, investors… my advice is to keep your ear to the ground, build up those funds and have them available so you can leap on a deal when it comes along!

What’s your predictions on the market and how things could pan out over the next year? I’d be interested to know what your strategy involves as you seek to expand your portfolio! The best way to get in touch is through LinkedIn.

Hasan