Starting Safe and Playing Safe in the Real Estate Industry

Investing in the Uk real estate industry

The UK real estate market although termed as a safe-haven for investment still poses some serious risks, especially for start-up investors. This is mainly due to the uncertainty, and serious risks, especially for start-up investors. This is mainly due to the uncertainty, and volatility of the economic that is possibly being shaped by the political atmospheres in the country.

Furthermore, it is going to be a challenge for young commercial and residential real estate investors considering that the international investment arena is slowly pushing British back into the home market. We are experiencing a scenario whereby every investor is exploiting options for safe investment in order to safeguard their investing power. In this regard, most investors would prefer to pour their money into the construction firms as well as homebuilders instead of the brick and mortar itself. Even though there is a recent blip, analysts from experience invest have termed this to be a reasonably great bet especially for newbie investors.

How well is the UK property market performing?

Although the property sector is doing well, with this excellent performance observed in the real estate industry in the UK, nervousness also starts to creep in. In fact, the houses prices are at an all-time high which makes investors grow cold feet fearing a potential economic risk. According to statistics,  homebuilders who are considered to be a safer route at the moment experienced a 15x long-term low back in 2008. But why are we saying that homebuilders provide a more secure alternative? Well, considering the above figure, we can say this with confidence because homebuilders are making it home and dry with an all-time high valuation experienced early this year. Experience invest experts have predicted that this trend is likely to be sustained hence the reason for newbie investors to venture into homebuilders’ investment.

At the moment there is no strong evidence to suggest that a slowdown would be experienced in by homebuilders anytime soon. Sales from houses are skyrocketing, and the overall value of prices is still going up. But what does this mean in terms of interest rates? Well, as a young investor you could possibly be looking for ways to increase your investing power through the credit systems. With regards to this, Mark Carney who is the governor of the Bank of England advised the Treasury committee that this is an opportune moment for the bank to raise the interest rates. However, there is no need for panic because Carney affirmed any potential creditors and debtors that such a rise would be limited and gradual. Regardless of this affirmation, however, you may need to tread carefully because homebuilders’ shares are always sensitive to any slight changes in the rates of mortgages.

Bank interest rates are stable

Talking about bank interest rates, you should be very careful when investing in the property market especially considering that rates are about to rise anytime soon. There is a skittishness which looks to follow the buoyancy in the UK property market. Just like everyone else, you should have your eyes on the Bank of England. You may choose to withhold your investment and wait for the Bank of England to make the big announcement. It is always better to wait and act later especially if you are not sure about the uncertainties that are likely to shift the market in your disfavor. The best part is that any rise in the interest rates would only be made based on a strong economic growth, and what better platform for the property sector to thrive on than on such an economic baseline.

Elena Tahora

I just love writing. When I write, I feel relaxed and at ease with myself. I am also a so called Nomad and have travelled to over 40 different countries to date.

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