Will the 18-year UK Property Cycle be Right Again?

by | Jun 1, 2021 | buy to let, HMO |

Will the 18-year UK Property Cycle be Right Again?

There is a saying, a watch is right 2 times a day. There are many that bet their UK property investments based on cycle analysis.

  • Fred Harrison conceived the concept of the 18 year property cycle
  • He correctly predicted both the 2008 and 1990 property crashes
  • He now predicts the UK will suffer its next major house price crash in 2026  

 

So much for predictions, as demonstrated during Covid. We had Hong Kong Investors offer 20% below the memo of sales and some backed out. We did a wait and see as well as all our properties were cash flowing nicely. Knight Frank predicted property prices would fall 7 per cent, while Savills forecast a 10 per cent fall. The Bank of England was even gloomier – predicting that house prices in Britain would fall 16 per cent due to the coronavirus economic crash.

Guess what, they were all wrong. UK property prices shifted strongly. Now it is a complete sellers market in the UK Property market. It will be interesting to see what happens once all the evictions and mortgage relief works through the system. We have in legals a fantastic deal in South Shields from a London landlord whose tenant not only did not pay since March 2020, but trashed the place. We will probably see more of this.

Another prediction,Fred Harrison, a British author and economic commentator, successfully predicted the previous two property crashes years before they occurred – and his 18-year property cycle theory says that house prices should continue to boom before crashing in 2026.

Fred Harrision makes these predictions having identified an 18-year cycle that he has mapped out from hundreds of years’ worth of data.’Back in the 1930s, an 18-year business cycle was identified for trends in the city of Chicago,’ explains Harrison.

His dire warning of ‘House prices will peak in 2026 followed by a recession that will eclipse what happened in 2008″ is not for the faint hearted or overly leveraged. 

Our way of trying to predict, is to try to buy as good as possible, have 5-10 year social housing contracts with no voids, no management and virtually no maintenance and be extremely under leveraged. We have strong positive cash flow, pay down and have a unique business model.

thoughts??