As I started to compose this month's column, I noticed that this makes five (5) years that I have been contributing my views to Property Investor NewsTM. A bit of a shock there as it does not feel like five years have passed. With this January edition, let me focus on the bigger picture and some things that are happening this year which may be relevant to your investing success.
The power of going slow
Various indexes have announced that house prices are up in the UK compared to a year ago. Depending on where your investments are located and the property type your mileage may vary. This is even more likely given that the indexes do not agree. By most measures the national and regional averages do show an upward movement in prices so most investors would say we had a good year. For your existing portfolio, you do not have to do much other than collect the rent and maintain the property to benefit from price appreciation. Not hands-off investing, yet close enough when you have an established portfolio.
Demographics are one of the best ways to understand house prices. If the local population is growing there will be increasing demand for housing. If more households are forming then that will add to demand. If the local residents are employed and are enjoying good employment prospects they will be able to pay the rent or pay the monthly mortgage loan payments. This gives us three ways to judge the need for housing.