The rise of property investor superstars – last leg of the property cycle. (Data & Graphs)

Interesting article: https://www.dailymail.co.uk/femail/article-9985881/Student-22-whos-second-home-insists-theres-no-reason-young-people-buy-houses.html

“Young guy buys property renovates and resells. Wants to build a portfolio.”

I’m seeing more and more mainstream media talk up property as a speculative asset.

In the last leg of the last property cycle there was a guy called Ajay Ahuja who built up a portfolio, sold education courses and got a lot of media coverage: https://ajayahuja.co.uk/my-story/

This time round I think we’ll see the rise of people like Samuel Leeds: https://www.property-investors.co.uk/

In any case you know the market is beginning to get into its speculative phase when :
– mainstream media starts running stories about people making fortunes from property
– you get the rise of ‘property investor superstars’ ,
– competition for property gets ridiculously intense
it just says to me: this is the last leg of the 18 year property cycle.

I looked at the office of National statistics data which goes up to December 2020 and you can see based on the different charts how ‘thin’ the market is.

You’ll see from the charts, on the last leg of the last property cycle between 2003 and 2007. There was roughly twice as much housing stock for sale as today. Back then the market was fuelled by weak credit controls.

This time round, the market seems to be fuelled by a reasonably large number of credit worthy people competing for relatively limited supplies of property.

In theory we should see an easing off of competition as people are made redundant due to cessation of the furlough scheme. And in theory this should drive more supply onto the market as people need to sell their properties because they can’t afford mortgages.

However, due to low interest rates, it’s probably 20% cheaper to occupy a property with a mortgage versus renting. I think cessation of the furlough scheme will increase supply a little, but my guess is that the market will continue this kind of upward price trend, sucking in more people speculating on property, leading to more upward price movement.

My prediction: As ever I think we are in the last phase of the current 18 year property cycle.

https://nicholashgarner.medium.com/uk-18-year-property-cycle-and-the-end-of-the-long-term-debt-cycle-fb4aa4abadce