November 21, 2019

Property prices go up or down based on the supply and demand

property prices

Market growth is incredibly important when analysing property prices and why they fluctuate so much.

During times of high demand the prices are bound to go up and the same with the opposite, during times of low demand, the property prices tend to go down. It’s the art and act of ‘supply and demand’.

In the UK it is an ever-increasing population, which signifies that demand tends to be high. In general, demand is always present and property prices will continue to increase. This is great news for property investors and that’s why the UK attracts so much attention from investors all over the world. On average, the UK property prices double every nine years – that is a magnificent increase.

To boost capital growth, a person can refurbish the property that will make it increase in value but making money from property is fairly straightforward when considering ‘rental income’. It can take long periods of time for property prices to go up but it sure is worth the wait, as this is where real property wealth sits. So wait patiently and watch market growth, the property prices will work in your favour.

Utilising a property so that it pays out regularly is a smart move. It can be considered as a business, one that will pay the bills. A person can figure out the amount of money that can come in from renting and make a budget for costs. Getting returns on this investment decision is so likely that it should be on the top of everyone’s agenda – enter the real estate market! With the cash flow from rent and inevitable capital growth, a person can sincerely expect to earn very decent money from property investments.

Minimise the risks of property investing – why would you not do otherwise? By understanding the real estate market a person is able to build specific and tailored strategies into investments that help to combat risks and make money safer.

Back in the day, for example in the early 2000’s getting on the property ladder was a lot easier. 100% mortgages were available which meant people didn’t need a deposit and could buy a house a lot easier than it is now. First-time buyers were a popular trend. Between first-time buyers and investors in the period where it became fashionable to buy a property for investment, house prices increased on a large scale. However that doesn’t mean that the property market isn’t risky, as there have been market crashes as in 2007, but that’s just part of the real estate market – we have to be prepared.

If you can buy below the market value (BMV) then the moment you purchase a property, you have made the difference in profit. This gives an investor instant protection, as if the market did drop, it wouldn’t actually have a detrimental effect.

The tip is: do not spend a lot of time searching for the ‘perfect property’; spend a lot of time searching for ‘the perfect seller’. So find someone who is perhaps looking to sell their property fast, which will mean they’re more inclined to lower their property price to get rid of it. They could be in a hurry or might need the cash fast. This is a fantastic opportunity for a hungry property investor.

Written by Gemma Smith

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