Current Issues House Prices Aug2022
Wed, 8/3 5:01PM • 8:08
prices, inflation, places, population, growing, areas, property, happen, fundamentals, countries, year, recession, house, austerity, falling, growth, yields, absolute bs, uk, declining population
Brett Alegre-Wood 00:01
Hey guys, so current issues, let's talk about house prices. And this is August 2022. So, as prices have had, it's interesting, you know, kind of paves me off house prices, when you look at the average across the UK have been going up and everything's been fantastic. And their media has been, you know, it's almost like, Oh, this is amazing, you know, the fact that we've had this, and you know, it's been growing 10% year on year, and blah, blah, blah, and all this. But they don't look at the portfolio and look at the portfolio, we've got of, you know, over 1200 properties. And I start to look at the data. And what I find is that that's disproportionately so I've always said, get local, you know, and I think with all these figures, you have to get local because I think those figures are lying to you. The media is lying to you. And I think what you've got to look at, and and I certainly for my own portfolio, I've got a number of properties that are in places that are getting great yields. So make no mistake, the yields. Fantastic. Okay. But the capital growth has not been there, since austerity started with the global financial crisis back in 2008. So really, nothing has happened, you know, prices dropped. And then I kept it might have crept up a little bit, but nothing really dramatic. I mean, we used to talk about, and in fact, a lot of people used to say it as if it was gospel, that property doubled every seven or 10 years. That certainly hasn't been the case. And so to believe that is still the case, in all places in every property is absolute Bs, and don't fall for it. Because there's still a lot of salespeople running around that don't understand property, and that don't understand the fundamental changes that are happened that have happened and are continuing to happen. Things like population. Yeah, the reality is, the population the UK is not growing exponentially. In fact, most developed countries, it is stagnant. If not, it's going to decline. I mean, China already has a declining population, a lot of countries, the only way their population is still growing, is buying buying migrants in. So Brexit was a real kick in the teeth for that, and will probably suffer from that, you know, and suffer that in the population. And what that what does that mean? We need all these additional houses allegedly. Okay. But if the population and growing well, why don't we need to lose their houses? And then the question becomes, where do we need these houses? We're talking about Greenbelt. You know, let's get more Greenbelt built on Greenbelt. Well, actually, do we really need to build on Greenbelt? Because most of these people, and mostly young people want to live in the cities where all the fundamentals are? Yeah. So house prices when we talk about him now. Okay, we're gonna be talking about two different types of house prices, the areas where the fundamentals, you know, the London's the Birmingham, the Manchester's, you know, okay, you can chuck in a Liverpool and Leeds there, and a Sheffield and possibly some other, you know, I mean, there's plenty of other places that a good and have fundamentals and have investment going in them have transport links, and have shops, schools and all this sort of stuff and are desirable for people to live in. Okay. So they are the places where property potentially, will double every seven or 10 years, because that could still happen, because there is the demand happening. I mean, the problem is right now is there's too much stuffing around and playing with the market uncertainty in the market, from a political perspective to have that happen, everywhere. Okay. The other side is the areas that just aren't getting any investment. They're just becoming ghettos. There. There's no investment in them when there's no, you know, when there's falling population, no investment going in, and there's nothing stimulating that house prices can't do anything but stay where they are. Now what I mean by staying without state with our is actually going down because inflation is toggling them. So unless your property has grown by at least inflation, yeah, it's going down, the value is devaluing. And that is what has been happening across the country. So you can hear all this political BS and that, but that's rubbish. Now, let's look more specifically about what's going to happen in the next year. I think we're gonna see house prices, and we're talking about averages now. Okay. I think some places do better. Some places do much worse. Okay. So I think house prices are going to continue to go okay, okay, you know, and then October, we'll probably enter a recession or start to slow down towards a recession, we might not have two economic quarters of negative growth in October, but the reality is, is that things will start to slow down. So I think house prices may start to ease off in some areas. In some areas, they'll probably hold where they are. I don't think barring any major dramatic change us stalling and totally falling or who knows, or inflation remaining really high. Watch my other videos on that. I've got one on interest rates, inflation, recession.
Brett Alegre-Wood 05:01
You know, I don't think that's going to happen, I think we're gonna see is the more slowdown and we may see some prices drop over the winter. That's normal things normally slow down over the winter, October to March. But I think in March, we might not see the spring bounce as much as I think next year, people are going to be sort of be a bit jilted. You know, we had COVID. And then this year, 2022, everyone's gone, right? I'm on holidays, I'm sick of this last two years, I'm going to get out and go my Spain holiday, I think reality is going to bite when energy prices really start to bite in through the through the winter. And as we come out, I think it will still be subdued next year, subdued means that they're not going to be growing dramatically 10%. You know, and I think really house prices probably over the next year, I think we might get some growth because there's a lot of pent up demand, and certainly in those good areas, you know, city centres, you know, a lot of the redevelopment is happening, I think we're still gonna see some growth in those prices. Okay, because there's so much demand gonna come from overseas as well, because remember, soon as the world hits a recession, you know, various countries that are in recession, what do the wealthy people in those countries do? They put their money into the UK. Now I used to say 10 years ago, they put it into London, now, Birmingham, Manchester benefit from that as well. Leeds and Liverpool benefit from that as well. So some of these major cities are now going to see some of that cash flowing and, and some of that cash is now even seeping into the commuter towns of those areas and the outer areas and some of the other places like maybe your Bristol's and your even your Portsmouth and things like that little places Brighton's, you know that sort of places that have good fundamentals, and a reasonable being now, I'm not saying invest in those places, because actually, for us, there's not a big enough market there. But I really think you know, you're going to have these to tale of two cities. And really, you want to pick the cities with the fundamentals, because they're the ones are going to continue to grow, because they're the ones where the population is expanding. Whereas everywhere else, the population is actually dwindling, getting older. And basically, it's just not becoming more and more of a ghetto, crime will increase. Therefore, you get worse tenants. Yes, you may be able to charge more rent, but you'll have more issues. So that's where in those areas, you really want to be getting rental legal insurance on those sort of places. Yeah. So that sort of gives you a bit of an idea house prices? I'm not, I don't think we're going to see house prices drop 30% I don't think we're going to see dramatic shock. Even though some of the countries around the world I think we may see some pretty serious stuff happening. I don't think that's going to happen in the UK. Because we've been self harming ourselves through austerity and Brexit and all this stuff. For 10 years. I've been saying this for a while. You know, I think it's just going to be that's how it is. Okay, guys. Yeah, look, guys, any questions you've got down there, just down below, you've got a thing. You can ask any questions and record a video posted on social media for you to answer any questions. So yeah, anything, sent it through and I'd be happy to answer. Alright guys, have a great day. See you later.
Read about more of our Predictions for Property Investors For August 2022.