Assetz® News - No better time to buy?

No better time to buy?

23rd December 2008 |

In recent years the perceived wisdom has been that the way to invest has been to buy as prices are rising and watch them rise further. In an age of consistent economic growth and rising property prices, that made sense.

Since the onset of the credit crunch, however, the situation has changed markedly, with the property market decline marking the earliest phase of what has over the course of this year turned into a recession, something that in Britain's case is expected to be confirmed when the fourth quarter figures for this year emerge.

But while the economic situation may be bad for those looking to sell property and worse for employees of Woolworths and other sinking businesses, there may be benefits for investors. While many who bought at the end of the boom will have suffered a short-term blow as the subsequent drops in price have depreciated the value of such assets, investors who purchase in the near future could have a very different situation to deal with.

Rather than buying as prices rise and hoping for the trend to continue - the sort of scenario that may encourage short-termism - the winners now may be those who buy when prices and interest rates are lower, picking up bargains and focusing on the long-term gains to be made from the eventual recovery.

One individual to point out the bargain potential that exists right now is regional housing expert for Persimmon Homes in the Lancashire and Cumbria region Diane England. She commented: "Now is actually as good a time to buy as any because in addition to the positive interest rate news, which is great for buyers from across the spectrum - from youngsters looking to take their first step on the property ladder to those looking to make the move into a bigger home - you can get a bigger house for your money."

Another developer - Miller Homes - said this week that lower rates have already been seen to make an impact, reporting that its own number of buyer enquiries rose after the 1.5 per cent base rate cut in November and noting that other building firms, property websites and the Land Registry had seen a similar bounce. It seems there are plenty taking note of the bargain opportunities that are out there.

Of course, for such buyers whose sole aim is to find a house they will enjoy living in, the satisfaction is immediate. But for those who are investing it is the bigger picture that may count most.

Such a big picture was referred to last week by Bank of England deputy governor Charles Bean in his interview with the Financial Times. Apart from his headline-grabbing comment that it is "possible" the base rate may yet fall to zero - something that may further boost interest in buying - he offered the most reassuring comment of all about the recession. He said: "We will get through this. The one thing that I can confidently assert about downturns and recessions is they do come to an end, eventually."

When that happens, it may be that those who have invested in the market when it seems to be at its weakest end up being the biggest gainers.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/4556.html. Alternatively, please see our full press release archive.