UK Property investing: 2023 Predictions
The Property Wealth System team wants to actively interact with our growing audience and regularly update our blog posts to keep you engaged.
We are a collective of property investors that have come together to train and educate aspiring investors as we were all trained in the past.
Our ethos is very much that there was someone who took their time to help us achieve our goals through property and we’re here to pay that forward to others.
My name’s James and I’m one of the expert trainers on the Property Wealth System 3-Day Intensive training programme.
As we journey through the final month of the year, it’s a natural time for us to look back and reflect on the previous 11 months. For most, the theme will be good riddance! What with the cost-of-living crisis, inflation like we’ve not seen since the 1980s, interest rate rises, the Russian invasion of Ukraine, 3 Prime Ministers, 2 Monarchs and all this off the back of 2 years of Covid, lockdowns, toilet paper shortages etc I don’t blame anyone who is looking at 2023 to form a completely fresh start for themselves.
With the rising cost of life in general and the hesitancy for employers to provide salary increases in line with inflation I am not surprised to see that thousands of people are looking elsewhere to boost their personal cashflow and generate multiple streams of income of which they have more control over than traditional methods.
The surge of the side hustle is noticeable on social media; the likes of Grant Cardone and Gary Vee shouting in your face to take financial responsibility for yourself is far louder than Robert Kiyosaki’s Rich Dad Poor Dad book of 25 years ago.
And while this is as good a time as any to take on a new venture or business, the mindset that we all share at PWS is that you can do this at any time!
A New Year isn’t your only opportunity to make a change but for many it will be and while many resolutions are broken just 3 weeks into the following year, a change of mindset and attitude are potentially all you need to make 2023 your best year yet in whatever business you are choosing to set up.
Keep reading to hear our top tips on how to succeed with your new venture in 2023.
There is still a nice chunk of time left this year to start preparing for 2023. One of my favourite quotes is “Give me six hours to chop down a tree and I will spend the first four sharpening the axe” attributed to Abraham Lincoln.
If you want to have a great year, January is not the time to be planning it! Get started early and use the rest of this year to reset and focus on your annual goals, breaking them down into bitesize targets and the necessary actions to take in order to achieve them.
Equally you might find that festive period is busy enough without trying to map out your goals for the year. I have coached clients who find it is more productive to carry out this exercise at a quieter time for them and run their year from May-May for example. This can be a great strategy if it works for you as the most important time to carry out this exercise is the one where you can fully commit to it and have a window to start as you mean to go on.
For those of you who can do this in December there is the added benefit that traditionally more houses get put on the market in early January than any other time of year and that people only start to feel the financial repercussions of Christmas towards the end of January at which point they might start to become more motivated sellers. Opportunities like this at the start of the year can provide you with much needed momentum to ensure you crush your targets and goals!
If you’re completely new to property then I’d highly recommend getting yourself an education of some form first (we can help with that!).
Before you shoot off like a rocket and get stuck in the Rightmove wormhole for hours there is no point in doing so unless you have a clear and defined strategy which you might not really understand unless you’ve got a decent grasp of the basics.
Remember that your investment area doesn’t have to be your own back garden. Our philosophy differs from others in that we recommend you go where the numbers work for your chosen strategy.
When I was starting out on my investment journey, I wanted to begin with low value Buy-to-Lets as I had never bought a property before. Living in Zone 3 of London doing this on my doorstep was going to be nigh on impossible, there weren’t any sub £100k houses there 11 years ago and there still aren’t!
Instead, I started looking in the North of England where there were plenty of 3 bed houses perfect for family rentals in that price bracket and there still are to this day. Don’t be afraid to look outside of an area you are unfamiliar with if the numbers look great and there appears to be opportunities, we’re big believers in utilising a team (hey, I’ll even be getting someone else to write this next month!)
One of the tasks I highly recommend you complete over the Christmas break is starting to diarise your regular trips to your investment area. It can be extremely easy to look at your calendar in a busy month and say I’ve not got a free weekend to go viewing dirty, smelly houses in need of some love. If you are serious about your property business then it needs to be prioritised, treat it like a hobby and you’ll get hobby-like results.
I appreciate you might not be able to get out of commitments that are already in the diary but if your business trips to your investment area are already in there at the start of the year then you don’t have any excuses as to why you’ve not gone. You might need to do some diary re-jigging as the year goes on but if you move the day(s) allocated to your area visit then it needs a new home instead of wiping it out of the calendar completely.
The model which I use is a “plan, do, review'' cycle.
Week 1 will be planning the trip, the second week the trip will take place and I’ll do viewings, check in on projects, meet vendors etc and the following week will entail follow up on what I’ve done before the cycle starts again.
If you’re balancing your property investment with a full-time job then this might have to be expanded to a monthly cycle however it's imperative you get regular facetime in your investment area for people to start taking you seriously.
I’ve spoken to dozens of agents who say they see a prospective investor once or twice before they fall off the wagon and either start looking in other locations because they’ve not found a deal in 2 months or decide that property is more hard work than they imagined so give up completely. Persistence is critical to your success and the more seen you are in your investment area, the better the relationships you build and ultimately property is a people business.
Over the years, having trained thousands of prospective property investors, one of the biggest challenges the majority face is the capital with which to invest.
Even if you have £1 million in your bank account, at some point that will either run out or all be in deals when another great opportunity rears its head!
With Christmas being the ultimate time of year for socialising here lies your opportunity, you need to start telling everyone what you do. If you’re just starting out you can start to tell people you’re hoping to buy a few investment properties next year and if you’re already investing you can tell them you’re really looking to ramp up your portfolio.
Now you have planted seeds in this person’s mind about what it is you do and the conversation may go down the route of property now or at some point in the future but when it’s brought up it won’t come as a surprise or completely out of the blue!
Typically, you’ll be asked how you’re financing the deals and you can simply say something along the lines of “I’m working with a couple of private investors and I’m giving them a better return than they get in the bank.” Again seeds are being planted here so at some point when you ask if they know anyone who might be interested in getting an inflation beating return on their hard-earned savings their subconscious will half be expecting it!
Start logging who you’ve spoken to about your venture and how interested they were in it so in the future when you get an offer accepted you’ve got an idea of who to approach to assist you with the financing.
In December looking at the year ahead, it feels like you will have a lot of time before Christmas comes back around again. When you’re in December and looking back at the January of this year it can feel that it was only 5 minutes ago!
If you don’t start taking control of your time it will pass by in a flash. Try to frontload your year and get as much done in the first half or even quarter of the year as possible to create momentum and it means if you do get waylaid or your progress stalls as the year goes on, you’ll already have hit some targets and made serious dents in others instead of scrambling around in November frantically trying to achieve what you set out to at the start of the year!
In terms of predictions for 2023, unfortunately my crystal ball has gone on the blink and I can’t be too sure of what will happen!
This could go horribly wrong for me and I might end up with egg on my face in a year’s time however based on trends, the data and economics I see, I believe that property prices will reduce up to 10% over the next 12 months.
The level of growth we’ve experienced in the past 24 months is unsustainable and I can’t foresee this upward trend continuing. Does this mean I’ll be sitting on my hands and not buying? NOT AT ALL!! It will still be a great time to be buying if you’re investing in property for the long run.
Don’t wait 3 years to start buying because you think that’s when the market will bottom out, take advantage of opportunities in the market and enjoy additional cashflow from today! There’s no point in waiting as we will never know what is around the corner. I also think that material costs will remain high due to lack of supply, however builders will become less busy and we won’t have to wait as long for them to start working on projects for us.
With interest rates currently high compared to recent times I think there will be opportunities across a range of strategies; buy-to-let because others will be looking elsewhere and families unfortunately will be financially stretched, commercial to residential conversions as more business are taken online/the need for office space reduces but the need for smaller housing units increases and lease options will be an essential tool in any professional investors toolkit in securing purchase options from people feeling the pinch.
Perhaps towards the end of the year we might see interest rates reduce a little bit if the economy on the whole starts to improve. Please take this with a pinch of salt as if you’d have asked me to predict what went on from 2020-2022 I’d have been completely wrong!!!
With all this talk of working hard, it is equally as important to rest, spend time with loved ones so that you enter 2023 fully charged and raring to go. It’s a time of year we should be grateful for what we have and who we have around us which can be the inspiration for achieving the goals we set out for ourselves.
I hope you all have a fantastic festive season and accomplish all you set out to in 2023. Please check in for future blog posts from the PWS team and if there are any topics you want to see covered in the future then let us know in the comments section below.