“TO SELL OR NOT TO SELL?”-THAT IS THE QUESTION!! By Mark Welton
I was prompted to write this article, following a somewhat desperate call from an old client who had been spending too much time watching the News and reading tabloid newspapers! As a result, he was worried that the bottom was falling out of the property market and that he should be selling his properties (perhaps below market value he said!) to protect against the apocalypse that was facing the market!!
Now, although it would be nice to ask the great William Shakespeare what he thought, I reasoned with myself that he might have slightly less experience of the property market than myself and in any case, he is sadly no longer with us! The burden of responsibility to re-assure this anxious client was mine alone!
The fact is that my clients concerns are not all unusual, given the often, horrendously negative media commentary about the market. Many of us are, quite understandably, concerned about the security of our largest single investment, within the context of this seemingly unpredictable property climate.
My advice is quite simple; if you do not “need” to sell, for example, to realise cash for some reason, or if you cannot afford the outgoings and upkeep of your property, then do NOT sell.
Property must be viewed as a medium to long term investment and history demonstrates that over this period prices will rise. In recent years however, prices have levelled and in some cases fallen, but this is a relatively small snapshot in time and overall property prices will go up.
Try and focus on what the property market has done over the last 30-40 years and this perspective should allay your fears! What the market is experiencing at present and indeed what it may face over the next year or two is short term only. The long term is and always will be, a different story.
I passionately believe therefore, that you should hold on to your property (within reason) at all costs. If you are currently struggling to pay the mortgage or other outgoings, then look to perhaps get a lodger and rent out a spare room if you have one, in order to balance your books. If things are really tough as they can be right now, why not rent out your property and get the majority of your outgoings covered. But DO NOT sell unless you really have to or on the basis of a “short term perspective” on the market!!
All of this certainly does not mean that you should remain “static” in the market. If you need to and can afford it, trade up market and purchase a bigger property in “better” area. Now is the perfect time to make that type of move as the gap in property values between one property and another is much smaller than it has been in more recent times. Therefore if you have been considering moving to achieve more space for your growing family, now is the time to do it. Remember, when prices start to rise, which they will, you will make potentially significant gains, if you had been smart enough to make the move now when prices are lower.
Obviously, the reverse is true, in that if your game plan is to “downsize” and buy a smaller property, then now is not the best time, as the smaller gap between property prices may not maximise your property’s investment potential and release the equity that you might if values were higher.
So once again, do not sell. Postpone your decision until market conditions are more in line with your own plans and circumstances.
The golden rule in my book, is, to always stay in the property market if you can and do not let the inevitable vagaries of the market “panic” you into making decisions that you will later probably regret!