Making your decision to invest in the context of today's UK property market


You would naturally think that past investment success lays the foundation for confidence in the property market, but it can, as we found through our discussion points with clients recently, lead to greater reflection and sometimes paralysis in the decision-making process.

It has come up a few times through discussions with investors over how the market of today compares to its previous context.  This article may help investors frame their decision to purchase an additional buy to let property.

From a similar perspective, a first-time investor who has been watching the market in previous years may also find it beneficial in helping execute their decision.  Context to where you are in the decision-making process

This article assumes the reader is ready, willing and able to commit to a buy to let property but is just unsure over their timing and is written from this perspective.  It is not a synopsis over the merits of actually making the decision to go down the buy to let investment route, it assumes the reader has already made the decision that it is the right option for them.

We don’t offer financial advice, and anybody thinking of purchasing a buy to let property should speak to their financial advisor to determine if it is the right investment spectrum for them.

Surely past success is an indicator that this is the right thing to do?

For many people yes, their past success in the property market means they are looking to double down, save their deposit and then make their next purchase. For some people though it is difficult moving past the market of yesteryear. The market has moved considerably higher in recent years, fuelled in part by people’s changing perception of property in the face of the Covid pandemic. 

As investors have found the case in previous years, you typically can’t avoid comparing the purchase point of your last investment with what you are looking at purchasing in today’s market. Bearing this in mind, you can then feel paralysis of making a decision. You look at a property that is maybe 20/30% above what you paid for a similar property 3 or 4 years ago, and as many have found before you, it is difficult to get your head around the increase.

This is a natural reaction. As humans we tend to be risk averse and don’t necessarily boast about our successes. You can’t quite get your head around the success you have found and, at the same time, are risk averse to the ‘new’ market that has formed.

Remember the market context when you bought

You made a purchasing decision based on the context of the market at the time. What you ideally don’t want to do is fall into the trap of looking at your previous purchase price against the market of today.

Looking across national house price trends, some regions of the UK moved up 17% for the year to September 2021 (table below, source Land Registry). Within the range of figures, it is possible to summarise that some areas would have risen more than others. Indeed, where you would have bought would have had its desirable reasons to you and accordingly you may have experienced an above average capital growth.

The table below crystallises the market increase of the last 12 months.   Clearly, the year was unprecedented and a response to the Covid epidemic, and for the first 6 months of 2021 had the benefit of the stamp duty waiver. 


Of course, as with all markets there are winners and losers. The above figures are taken as an average within regions, so in some regions there will be some big, above average winners, and in others some below average performers.

Purchase Price £200,000 examples

Taking the above into context,  you can see why a property you may have purchased in a previous year, could be completely out of sync with the market reality of today.


What could be the right strategy for you?

Be bold in your thinking

You act like a first-time investor, you know the area you want to buy, you have saved the pre-requisite deposit needed to make the purchase and you look to trust your judgement in the context of today’s market. Switching off from the noise, you simply view the market in the same way that you viewed it years earlier and just execute the buying decision upon the same principles you used when you purchased before.

Extend your geographical stretch

Looking at the same area you researched and bought in before, you now realise that prices have moved to an unaffordable level to make the ‘buy to let’ sums work. Accordingly, we need to now investigate and look at widening your geographical area to gain a better fit for your buy to let strategy.

This is where we can possibly add real value to you as an investor, given our depth of coverage across particular areas of the UK where we believe there to be good growth prospects.

Understand where this purchase fits in your long term strategy

The value uplift of recent years, indicates that it would be potentially possible is to remortgage your existing portfolio and then raise funds to purchase a deposit for a new property. You can only do this of course, if you have executed the buying decision to begin with. 

If you put off the buying decision this means that you are then waiting longer to grow your portfolio. Typically, you can re-mortgage after 2 years (taking your lead from the end of an initial fixed rate) then release the funds from this property to then move forward to purchase the next property to grow your portfolio.

Wait and see - know when to action

You can take the view that the market is effectively ‘over-heated’ - this may be the opinion you form comparing the rise in the market with the overall economic outlook for the country. You can then set the parameters to how you would form a decision on a property, and take the wait and see approach. 

Of course, there is a danger the market may start to rise, and also you need to be aware of your strike point, as the last few years have shown, the market moves quickly when it is on the rise.


Hopefully this article has provided some depth and usefulness to your own thoughts on getting going on making that additional investment or indeed getting started on buy to let. 

Our clients typically work with us over a medium to long-term timetable, and we offer analysis and advice on opportunities. There is no ‘hard sell’, just pragmatic, best practice advice to help secure the best transaction possible.

Making your decision to invest in the context of today's UK property market