Could the Christmas lull be a buying opportunity for UK property?

As we head towards Christmas time there is evidence that some sellers are now looking for a relatively quick transaction so that they can thank their proceeds before Christmas. Christmas/New Year in the UK, and indeed in many other real estate markets around the world, is a relatively quiet time of year even if property markets in the UK are still riding high. This now begs the question, if you believe UK property prices will move higher in the short to medium term, could you take advantage of the Christmas lull to grab yourself a bargain?

There is evidence that property prices for example in the south-west of England are softening as we approach Christmas with falls of around 2.9% seen in the last month. It will be interesting to see whether this is replicated across the UK, as many expect, and whether indeed this prompts some property investors who have “missed the boat” to look again.

Chasing property prices can be tricky

Real estate in the UK has increased dramatically over the last three or four years and indeed the London market, as always, has been the leader. As we have seen over the last few weeks, the UK economy will end 2013 and begin 2014 as one of the strongest in the Western world leaving behind a difficult situation across Europe. As a consequence, many property experts believe that international investors will again look towards the UK in 2014 and perhaps many may be interested in picking up property during the Christmas/New Year lull?

Quote from PropertyForum.com : “In what could be a major development for the UK property market, last week’s trade mission by Boris Johnson and Chancellor George Osborne seems to have attracted the attention of Chinese investors”

It can be expensive and it can be dangerous to chase prices especially if the fundamental economic performance seems to suggest prices are moving too far too quickly. The situation with the UK is tricky because the economy is improving yet the worldwide situation is not keeping pace. This would suggest that more solid foundations for the UK property market are forming which should reduce the chances of a correction due to concerns about a “house price bubble”.

Is there still long-term value in property?

The UK market has performed admirably of late although many people are now starting to look toward some of the bombed out property markets in Europe for long-term value. If you have funding available, whether this is through a pension fund or some other long-term investment, you could argue there is more long-term value across Europe than some of the current hotspots such as the UK. You will need to do your homework, you will need to do your own calculations and you will need to come to your own decision as to whether there is value in other areas of the world.

Time and time again sceptics have highlighted expectations that overall worldwide wealth will derail from the property market and move towards other investment arenas. Time and time again property markets around the world have driven economies higher and higher and it is difficult to visualise a situation where property is not the leading long-term asset class. It will be interesting to see what happens in the short to medium term and whether current hotspots are replaced by more long-term value investment strategies.