Will Property Be Sexy Again?
Property has gone through many metamorphoses through the decades.
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However, for many landlords one thing that has remained the same is that it has always been a way to secure an income and side step the tedium of the 9 to 5. In other words, the pointlessness of working life. The endless team meetings, health and safety and equality refresher courses. Management pep talks from a boss who is either wet behind the ears or hasn’t a clue.
It’s true that property has gone through many changes over the decades……..
The shiny new property of the post war rebuilding boom, the idealism of the sixties where ‘property is theft’. In the seventies property became a battle field between the emerging conservationists and the modernist who wanted to redevelop everything with characterless blocks. In the 80s it epitomised the struggle between public and private. However, in the late 90s it changed again. This time property became sexy.
Property investment represented a lifestyle. A way of becoming fantastically rich. But more than that ………it became sexy.
Sexy property, sexily designed and sold by sexy people in sexy suits. A lifestyle, promoted across the media by sexy personalities such a Sarah Beeney. Property ladders, grand designs, aspirational, assessable but above all sexy.
And surprisingly we all fell for it hook, line and sinker.
Wake up call!
The last couple of years have been a wake up call for many people involved in property investment.
Many first time landlords have been hit by the reality that property is an asset. Like any asset its value can go up but it can also go down. In particular because property is one of the few assets that landlords and investors can secure large amounts of debt against and gear their investment it is also potentially a high risk investment.
The financial press has been full of stories of high profile property personalities who rode the wave of property debt and easy credit and are now facing financial ruin, Grant Bovey, the secret millionaire Chek Whyte, and Paul Kemsley an associate of Alan Sugar.
Can property recover its lustre and become sexy again?
The question many pundits are asking is; “can property regain its cache as an asset class and become sexy once more?”
The signs are not good. Property has had a hell of beating in the press and the public’s perception of it is poor. The big banks particularly the likes of HBOS were bought down by their unbridled love affair with property and their lending against property assets.
It is no longer viewed with the reverence that it has been over last 10 years, and many pundits have argued that we will not return to significant capital appreciation for many years to come.
Lenders stung by being over exposed to property have all tightened their lending criteria and now ensuring that they obtain greater security against any property assets that they advance money against. This will inevitably curtail asset values for many years to come.
Without growing house prices and property prices then property is no longer the sure fire winner for investors and landlords.
Sexiness of property
Let’s be honest the sexiness of property was linked very much to the spectacular and unsustainable dramatic increases in values of property. For example in the years 2002, 2003, 2004 house prices rose 25%, 15%, and 14% respectively. Without these dramatic rises and the promise of instant fortunes property is unlikely to regain its’ mantle of sexiness in a hurry.
That may not be a bad thing. Property for serious investors has always been a long-term investment. For a landlord who has several decades of experience such as myself I know the reality of property investment is also sorting out broken toilets and busted boilers. Property in my experience ain’t sexy.
Property investment should be a marriage not a ‘fling’
Property should be seen as a marriage not a short term exciting affair that will blow out in a matter of months allowing you to move on with no commitment or baggage.
For those that are prepared to commit, property investment will provide these investors with long term security and additional financial stability. For those that want a short term dalliance and a little bit of sexy fun then these investors should look elsewhere…………. Stamp collecting perhaps?