I’m going to be talking about whether house prices will rise or fall in 2021.
Hi, my name is Kevin McDonald, I’m a property investor and I’ve been in the industry for almost 20 years and I’m known as the UK’s leading expert in creative finance and property investment strategies and I’m the proud author of the #1 Amazon bestseller No Money Down Property Investment.
Okay, so a lot of people have been asking industry experts what will happen to house prices in 2021, will they continue to rise or will they fall?
Now, if somebody told me that we would be having a property market boom from March 2020, let alone that prices will continue to rise into 2021 I would have laughed them out of the room.
But here we are, so how did it happen?
Well, it happened for a number of reasons. First off, the Government introduced a Stamp Duty holiday which has sparked the flame of the property market but that wasn’t the only thing, the rise in furloughed employees and the continuation of the scheme actually meant people had more money and time available to think about what type of lifestyle they wanted and with working from home and the need for social distancing, lots of people have been looking at moving out of the cities and having a garden and all of this has been driven a lot of the property market.
Banking interest rates have also been dropped to less than 1% which means that for savers and those that have money in the bank you’re earning even less on your savings and there’s also been a lot of panic in the media about what could happen to the banking system and the possibility of a financial crisis on the horizon.
So as a result of all of this a lot of people with cash they’ve been moving their money into something safer and property is the safest thing that you can put your money into, especially with the reduction in Stamp Duty, with the furlough scheme, and with the lowest interest rates in history.
There are also foreign property investors bringing their money into the UK where they’re hit by negative interest rates trying to protect their cash in a safe environment and all of this fuels the property market and prices moving into 2021.
So will that continue or will we see some changes in the market?
Well, nobody knows exactly what’s going to happen, you would need a crystal ball and I don’t have one, nobody does but here’s what I do know about the fundamentals of property investing.
In 10 years time house prices will be higher than they are today, just like In the financial crisis of 2008. Within a few years, house prices had recovered and they continued to rise to a higher place. Now, of course, there will be drops in the market, possibly next year but overall industry experts are discussing a potential 4% rise in property prices and to put that into context, the market rose almost 7% in just under 7 months in 2020-2021.
So the expert still expect the market to rise, but let’s say there’s a reduction in house prices and they don’t rise 4%, maybe they drop 5% if that was to happen how do you protect yourself as a property investor? Well, you buy value and with the opportunity to add value using creative strategies, just how professional property investors have always done.
You see, as an investor, you do not want to be buying a property where there’s no way to add value. Why? Because you make your money investing when you buy, it is a gamble to just purchase a property and hope that it just goes up in value, that is not property investing that is speculation.
So what this really means is, asking the question will property prices rise or fall in 2021? Is the wrong question.
What you should be saying is, how can I buy value whether house prices go up or down? Because it is professional property investors who are always in the game and are looking for opportunities in the market. It’s irrelevant if house prices go up. It’s irrelevant if they go down.
What it’s about is buying value, purchasing the opportunity to add value and securing the potential of a cash-flowing asset that will generate you a positive income every single month.