Hi Paul, love your content. Keep it coming. Tip for you: I do a lot of video editing make sure you get your editor to normalise the audio on all your videos. This one is really quiet compared to the others and I'm struggling to hear on my phone.
I overheard an interesting conversation on a train today about many people facing negative equity. First of all, if you are able carry on repaying your mortgage and not looking to sell, it doesn't really matter. Some people who have over-stretchex themselves will be finding it hard. Rates are likely to rise further. From the all time low last year, rates are now 1.65% higher. Once your fixed term comes to sn end, this will mean having to find over £300 each month on a £250k mortgage. Taking into account rising cost of living in general, ptices can only go one way over the next couple of years, and it's not up. Some nice reductions in my area today.
Great post. I believe that we are nowhere near the crash for a simple reason: it never happens when so many "experts" are predicting it. Having said that, most propertty investors including yourself seem to be ignoring the fact that house prices are far too high in relation to salaries. Contrary to the popular belief, house prices (particulaly rents) are not high simply due to lack of supply - that's a contributing factor. However, they are high because people are able to pay them if only just. If your net income in London is £2k you would struggle to afford to pay a monthly rent of £1.2k. If you incime is, say, £1.7k you can't afford it. A more typical London rent of £2k requires a net monthly salary closer to £4k. This is more than most Londoners earn alone, but is still affordable for many couples and sharers. Whether the government likes it or not, WFH/hybrid work is here to stay. In my old firm we started trialling it in 2017 and many other firms well before. COVID-19 made this process faster. WFH will mean lots of empty office space. I assume some of this will be converted to residential place, potentially increasing supply. But as I said, prices are as high as people are willing and able to pay. The same principle applies to the sales market. Although most ordinary people can't afford to buy at the moment, there are enough thise who can and are willing to pay the current (and higher) prices. As long as this remains the case and tgere are no distressed sales, prices will remain high and keep on rising. Eventually the market will cirrect itself but as you said, a light correction of 5-10% in 2026 or so won't be signifucant. Finally, in 2008 Bank of England was quick to stop the crash by lowering interest rates. Ironically, this started what could be the biggest and longest bubble. This time is only different in a sense that the rates really can't go much lower.
Many investors/traders advice - that at the start of the bear market, you should sell and buy later on. My question - How do they know at the beginning of the correction - whether stocks would fall by 5%, 10%, 20%, 30% or more?
Sound logic and advice. It’s so key not to get caught up in the media hype and stay true to your proven strategy, all strategies should have contingency plans and like Paul said you should stress test your numbers before making any moves
Absolutely brilliant video paul, honestly love listening to people who know what they are talking about, and you can tell you're a genuine guy aswell Top man.
Brilliant 👏.. 👏 thanks im abroad last 8 months... All im reading is recession recession... Long term property is best investment for over 100 years as good as Gold
Paul, great vid. On a different note. Have you ever done a video about living in MC? I have been tempted and wondered the ins and outs and how much you genuinely need to have to move there, live comfortably and be accepted. Also what the tax levels are in reality. Don’t know if you consider doing something on this or happy to share anything, but would love to hear more
Good points. What if cost of living spirals out of control and people start to lose their jobs then surely people won't be able to afford properties thus demand will decrease. Also if those with mortgages struggle to keep up with payments they will have to sell thus increasing supply of houses. Surely this combination would cause house prices to decrease. A recession will surely cause job losses Thoughts?
It won't be recession this time, it will be a depression. Secondly, 3% price rise in the context of 9% of inflation is a significant drop in value. Especially if the inflation stays that high over long period of time. Finally, to stop the inflation, BeO will have to increase interest rates dramatically, and that means a big gib trouble both for the state and for the ordinary people. There is no other way around this, nothing else will stop the inflation. Putin will do his utmost to make the West bleed as long as possible using energy, grain, fertilizer and oil prices. Whoever says inflation is temporary this time is severely mistaken. We are about to face stagflation ... a correction is coming and Johnson's current plans to prop up the property market will not help at all. Wrapping up, property investment is the best you can do, ... but not at a run-up to a recession/ depression.
Very valid points. Employment is at an all time high.. too many jobs and not enough people. Understand what you are saying but can not see it happening. The wealthy will simply become more wealthy, buy the surplus property and rent to the poor souls that can not buy...
The wealthy will just buy the properties anyways just like they are currently doing at high prices, driving up property market by making houses scarce . Now imagine when the value drops !! I’m waiting for the housing price to fall. Iv saved up and wren it does, I’ll buy at cheaper rate than buy now then fall on negative equity
@@sammyg805 The whole economy in the UK is based on house prices. They won't be allowed to fall. Ass soon as there is a sign of this there will be a an intervention by the gov , stamp duty cut or something ... no hope for those who are young in this country. .Emigrate or slave all your life for a roof over your head. Now there is a plan for 50 year old mortgages which transcend generations ....Your children will thank you for making them slaves too.
I have £600,000 in a SIPP in cash having transferred multiple pensions with Hargreaves Lansdown and getting no interest, I transferred in January, I'm unsure where to invest, I'm tempted to invest in a free 100 tracker fund, I don't want to be clever just safe what to do ?
Drip feed into a S&P index fund as the market is down hard atm, personally I’d divide it up and scale in, there’s a deflationary bust on the way so keep some power dry for a crash, could be now could be later in the year but worth a buy atm for the long term, property is over priced with being outbid etc, market is skewed imho so I’m doing nothing with property personally
@@sjwtrading8520 thanks for the info it's an uncertain world, I do own four properties I bought in the dips since 2008 mortgage free, best thing I ever did, the rent dribbles in we have a comfortable lifestyle thank god, not sure about the stock market, I can't get the cash out without incurring a huge tax bill, I'm force to invest in the SIPP wrapper and I cannot by domestic property within the SIPP
Property over the long term is the winner! Short term maybe a little rough but going by past trends property is the best investment if done correctly. Due diligence is key.
Start a business, take the money out and buy a commercial property. Speak to an accountant on how to do it. If your over 55 you're onto a winner and won't pay 55% in tax. Good luck
There are some signs that the party's coming to end. More properties for ssle, fewer to let where I live. Good ones go fast but some end up in auctions. That's actually my other point - auctions are definitely getting more popular!
Furthermore, it's interesting that apparently many btl investors are now selling hence morev properties for sale and lack of rental supply. Surely rents will sky rocket? Many pundits tend to ignore the fact that rents are directly linked to affordability i.e. salaries. But something doesn't add up - if btl is as profitable as we've been let to believe, why are so many investors selling?
@@petervuorela7990 Recession / landlord bashing / tax on landlords shooting up if not through limited company. The average untrained landlord: 94% of landlords own their properties in their own name! Nuts from a tax perspective. The average landlord earns just £15k pa prior to tax. Only 4% of landlords do not have a day job. (These are all government stats...) so if you are earning buttons and being taxed to the gunnels and recession is coming, interest rates are going up plus inflation is killing your income then I guess you might call it a day... Alternatively if you are buying tax efficiently and adding monstrous values with individual properties giving you over £100k pa profit you may well decide to add more. Homeowners will happily buy empty BTL to live in. House prices are going one way in my opinion, maybe the party is just getting started: inflation is the property investors friend. Good luck.
Paul my brother if interest rates rise to the levels you predict don't you feel the homeowner market will be impacted majorly? if so then demand will be less and in turn prices will slow in growth maybe even drop.
Most property is mortgage free and 80% of the rest are on long term fixed rates. I understand your concern. I know high inflation boosts property prices... I have seen it so many times in the last 40 years. Good luck. Paul
@@PaulSmithTouchstoneEducation I know you are a boss in the field of property and have decades of experience but what happened in the late 70s is something can easily happen again if inflation reaches 25% plus! The factors that contributed to the collapse in that era are similar today with oil/energy prices going through the roof. To add to it I believe the term is helicopter money distribution due to the pandemic will also have an adverse affect. To combat inflation one of the keys are high interest rates from what I've gathered.
@@ratsliveonnoevilstar1 what’s the rational for buying anyways when it will crash next year ? Wouldn’t it make more financial sense to wait then buy at lower rate than be in negative equity ..
@@sammyg805 I guess it depends on if you factored that into your offer. And also of your buying to live in the property. If you recall, last time this happened you needed a 60% deposit. I doubt most people will have that even with a crash of 30%
Yes, this guy is full of it lol, He KNOWS a price drop is coming and the market is overpriced and leveraged landlords are in for a LOT of pain. By making these videos he is promoting his business and shoring up the belief that property us still good as gold because he is heavily invested in that belief.
@@FlyingFun.It depends how the situation will play out. I also think that the gov wont dramatically change the interest rates for another 2 years (elections coming). However newspapers such as Telegraph already write articles about house prices decline. It could be the case that the media is ‘preparing’ the ground for an interest rate hike. The truth is that the economy is highly leveraged and if other external factors ( US FED) raise the rates and companies start defaulting, the same thing will happen in the Uk.
@@FlyingFun. really? Mind-reading is not one of my skills...which course did you do to learn that? I also own a lot of gold, and crypto.... my number one asset class for security is UK investment property. Good luck whichever wealth path you take.
Hi Paul, love your content. Keep it coming.
Tip for you:
I do a lot of video editing make sure you get your editor to normalise the audio on all your videos. This one is really quiet compared to the others and I'm struggling to hear on my phone.
Glad you enjoyed, thanks for the tip.
I overheard an interesting conversation on a train today about many people facing negative equity.
First of all, if you are able carry on repaying your mortgage and not looking to sell, it doesn't really matter.
Some people who have over-stretchex themselves will be finding it hard. Rates are likely to rise further.
From the all time low last year, rates are now 1.65% higher. Once your fixed term comes to sn end, this will mean having to find over £300 each month on a £250k mortgage.
Taking into account rising cost of living in general, ptices can only go one way over the next couple of years, and it's not up.
Some nice reductions in my area today.
I disagree Peter, but no need to disagree lets just see what happens.. good luck
Great post.
I believe that we are nowhere near the crash for a simple reason: it never happens when so many "experts" are predicting it.
Having said that, most propertty investors including yourself seem to be ignoring the fact that house prices are far too high in relation to salaries.
Contrary to the popular belief, house prices (particulaly rents) are not high simply due to lack of supply - that's a contributing factor. However, they are high because people are able to pay them if only just.
If your net income in London is £2k you would struggle to afford to pay a monthly rent of £1.2k. If you incime is, say, £1.7k you can't afford it.
A more typical London rent of £2k requires a net monthly salary closer to £4k. This is more than most Londoners earn alone, but is still affordable for many couples and sharers.
Whether the government likes it or not, WFH/hybrid work is here to stay. In my old firm we started trialling it in 2017 and many other firms well before. COVID-19 made this process faster.
WFH will mean lots of empty office space. I assume some of this will be converted to residential place, potentially increasing supply.
But as I said, prices are as high as people are willing and able to pay.
The same principle applies to the sales market. Although most ordinary people can't afford to buy at the moment, there are enough thise who can and are willing to pay the current (and higher) prices. As long as this remains the case and tgere are no distressed sales, prices will remain high and keep on rising. Eventually the market will cirrect itself but as you said, a light correction of 5-10% in 2026 or so won't be signifucant.
Finally, in 2008 Bank of England was quick to stop the crash by lowering interest rates. Ironically, this started what could be the biggest and longest bubble. This time is only different in a sense that the rates really can't go much lower.
And that interest rate is THE most important thing especially when people are poorer because of inflation.
For somebody who isn’t the sharpest tool in the box this was seriously helpful. Thank you
Thank you for watching!
Thanks Paul for real information.
Thank you Paul, for the very useful information based on all the newspapers and reviews
Thank you for watching Krishna! 🙂
Many investors/traders advice - that at the start of the bear market, you should sell and buy later on. My question - How do they know at the beginning of the correction - whether stocks would fall by 5%, 10%, 20%, 30% or more?
Sound logic and advice. It’s so key not to get caught up in the media hype and stay true to your proven strategy, all strategies should have contingency plans and like Paul said you should stress test your numbers before making any moves
We couldn’t agree more, Erhan 🙂
Absolutely brilliant video paul, honestly love listening to people who know what they are talking about, and you can tell you're a genuine guy aswell
Top man.
Thank you for watching Liam 🙌🏻
Brilliant 👏.. 👏 thanks im abroad last 8 months...
All im reading is recession recession...
Long term property is best investment for over 100 years as good as Gold
100% agreed!
So useful video well done 👍
Thank you for watching Nabaz 🙌🏻
Big thanks Poul for everything you do, i really enjoy your knowledge about property investment.
Huge respect to Poul and Touchstone education team
Thank you for watching! 🙌🏻
Well said. Sensationalist headlines to grab attention.
Lots of reductions in my area recently.
Time will tell if it's just the market going quiet for summer holidays or something deeper.
Yep
No Swearing. Well done Gordon. 😄
Still a great recipe for success.
Thank you for watching Hamish!
I'm pleased I'm not the only one thinking that. 😂 no offence take is as a compliment Touchstone 😀
Paul, great vid. On a different note. Have you ever done a video about living in MC? I have been tempted and wondered the ins and outs and how much you genuinely need to have to move there, live comfortably and be accepted. Also what the tax levels are in reality. Don’t know if you consider doing something on this or happy to share anything, but would love to hear more
Great job..and thanks for the hardwork!
Thank you!
Good points. What if cost of living spirals out of control and people start to lose their jobs then surely people won't be able to afford properties thus demand will decrease. Also if those with mortgages struggle to keep up with payments they will have to sell thus increasing supply of houses. Surely this combination would cause house prices to decrease.
A recession will surely cause job losses
Thoughts?
It won't be recession this time, it will be a depression. Secondly, 3% price rise in the context of 9% of inflation is a significant drop in value. Especially if the inflation stays that high over long period of time. Finally, to stop the inflation, BeO will have to increase interest rates dramatically, and that means a big gib trouble both for the state and for the ordinary people. There is no other way around this, nothing else will stop the inflation. Putin will do his utmost to make the West bleed as long as possible using energy, grain, fertilizer and oil prices. Whoever says inflation is temporary this time is severely mistaken. We are about to face stagflation ... a correction is coming and Johnson's current plans to prop up the property market will not help at all. Wrapping up, property investment is the best you can do, ... but not at a run-up to a recession/ depression.
Very valid points. Employment is at an all time high.. too many jobs and not enough people. Understand what you are saying but can not see it happening. The wealthy will simply become more wealthy, buy the surplus property and rent to the poor souls that can not buy...
The wealthy will just buy the properties anyways just like they are currently doing at high prices, driving up property market by making houses scarce . Now imagine when the value drops !! I’m waiting for the housing price to fall. Iv saved up and wren it does, I’ll buy at cheaper rate than buy now then fall on negative equity
@@sammyg805 The whole economy in the UK is based on house prices. They won't be allowed to fall. Ass soon as there is a sign of this there will be a an intervention by the gov , stamp duty cut or something ... no hope for those who are young in this country. .Emigrate or slave all your life for a roof over your head. Now there is a plan for 50 year old mortgages which transcend generations ....Your children will thank you for making them slaves too.
U look like Gordon Ramsey with those shades on good video !
I have £600,000 in a SIPP in cash having transferred multiple pensions with Hargreaves Lansdown and getting no interest, I transferred in January, I'm unsure where to invest, I'm tempted to invest in a free 100 tracker fund, I don't want to be clever just safe what to do ?
Drip feed into a S&P index fund as the market is down hard atm, personally I’d divide it up and scale in, there’s a deflationary bust on the way so keep some power dry for a crash, could be now could be later in the year but worth a buy atm for the long term, property is over priced with being outbid etc, market is skewed imho so I’m doing nothing with property personally
@@sjwtrading8520 thanks for the info it's an uncertain world, I do own four properties I bought in the dips since 2008 mortgage free, best thing I ever did, the rent dribbles in we have a comfortable lifestyle thank god, not sure about the stock market, I can't get the cash out without incurring a huge tax bill, I'm force to invest in the SIPP wrapper and I cannot by domestic property within the SIPP
Property over the long term is the winner! Short term maybe a little rough but going by past trends property is the best investment if done correctly. Due diligence is key.
Start a business, take the money out and buy a commercial property. Speak to an accountant on how to do it. If your over 55 you're onto a winner and won't pay 55% in tax. Good luck
We are nearly there Paul, won't be long before we hop on, great video, I don't believe the media anyway 😀
Thank you for watching, Denise! 🙌🏻
Absolutely love your content, well educated views and clearly pointed out accurate information 👌🏻👌🏻 Thankyou for your service 🙏🏻🇬🇧
Thank you for warm words Dave! 🙂
@@PaulSmithTouchstoneEducation my pleasure 🙏🏻
There are some signs that the party's coming to end.
More properties for ssle, fewer to let where I live. Good ones go fast but some end up in auctions.
That's actually my other point - auctions are definitely getting more popular!
Fewer to let.. hmmh
Furthermore, it's interesting that apparently many btl investors are now selling hence morev
properties for sale and lack of rental supply. Surely rents will sky rocket?
Many pundits tend to ignore the fact that rents are directly linked to affordability i.e. salaries.
But something doesn't add up - if btl is as profitable as we've been let to believe, why are so many investors selling?
@@petervuorela7990 Recession / landlord bashing / tax on landlords shooting up if not through limited company. The average untrained landlord: 94% of landlords own their properties in their own name! Nuts from a tax perspective. The average landlord earns just £15k pa prior to tax. Only 4% of landlords do not have a day job. (These are all government stats...) so if you are earning buttons and being taxed to the gunnels and recession is coming, interest rates are going up plus inflation is killing your income then I guess you might call it a day... Alternatively if you are buying tax efficiently and adding monstrous values with individual properties giving you over £100k pa profit you may well decide to add more. Homeowners will happily buy empty BTL to live in. House prices are going one way in my opinion, maybe the party is just getting started: inflation is the property investors friend. Good luck.
Paul my brother if interest rates rise to the levels you predict don't you feel the homeowner market will be impacted majorly? if so then demand will be less and in turn prices will slow in growth maybe even drop.
Most property is mortgage free and 80% of the rest are on long term fixed rates. I understand your concern. I know high inflation boosts property prices... I have seen it so many times in the last 40 years. Good luck. Paul
@@PaulSmithTouchstoneEducation I know you are a boss in the field of property and have decades of experience but what happened in the late 70s is something can easily happen again if inflation reaches 25% plus! The factors that contributed to the collapse in that era are similar today with oil/energy prices going through the roof. To add to it I believe the term is helicopter money distribution due to the pandemic will also have an adverse affect. To combat inflation one of the keys are high interest rates from what I've gathered.
Historically speaking, house prices weren’t as over inflated as they are right now. We’ll see a crash In 2023-2024. But hey, I’m buying anyway:)
@@ratsliveonnoevilstar1 what’s the rational for buying anyways when it will crash next year ? Wouldn’t it make more financial sense to wait then buy at lower rate than be in negative equity ..
@@sammyg805 I guess it depends on if you factored that into your offer. And also of your buying to live in the property. If you recall, last time this happened you needed a 60% deposit. I doubt most people will have that even with a crash of 30%
Gordon Ramsey predicting a crash
Do you really think I am Gordon Ramsey?
@@PaulSmithTouchstoneEducation
I think your better !
£1,000,000 +
We’re breeding to fast for a housing market crash😂
You can see why we've put the navy on the channel lol. I'm looking on Rightmove for a place in Rwanda. Government has sold it quite well lol 🤣
👍
Talk it up all you want if your highly geared at some stage your fecked imho
Yes, this guy is full of it lol,
He KNOWS a price drop is coming and the market is overpriced and leveraged landlords are in for a LOT of pain.
By making these videos he is promoting his business and shoring up the belief that property us still good as gold because he is heavily invested in that belief.
@@FlyingFun.It depends how the situation will play out. I also think that the gov wont dramatically change the interest rates for another 2 years (elections coming). However newspapers such as Telegraph already write articles about house prices decline. It could be the case that the media is ‘preparing’ the ground for an interest rate hike. The truth is that the economy is highly leveraged and if other external factors ( US FED) raise the rates and companies start defaulting, the same thing will happen in the Uk.
@@ilianalouka8648 so basically nobody knows then
I have been doing this for 40 years... how much history do you want?
@@FlyingFun. really? Mind-reading is not one of my skills...which course did you do to learn that? I also own a lot of gold, and crypto.... my number one asset class for security is UK investment property. Good luck whichever wealth path you take.