Is UK in a recession? If we are, how long is it likely to last? How should I invest my money in 2022 and 2023 to avoid losing money to inflation? What are the best strategies for property investment during both inflationary and contracting economy? Stay tuned as we answer all of the above and more in this page.
Is UK In A Recession?
The short and sweet answer to this question is a resounding YES, however, even though central banks around the world have danced around this issue, there has been a global recession, not just in the UK but in around 2/3 of the world and it has been here for the past 2 quarters. They have now started saying it is a recession and they will try and make it a “shallow and short” one, which is correct somewhat if you think we are just heading into one. Bank of England has been raising rates and will continue to do so for at least another 2 quarters at which point, the base rate would be somewhere between 3.5-4.5%. This should reduce demand in borrowing and lending and coupled with cost of living crisis would result in lowering in demands for goods and services which in turn reduces the inflation.
How Long Will It Last?
Before, telling you the answer to this question, we want you to go and look at our video on predicting market behaviour back in first quarter of 2020. At the time, everyone was saying the market will contract and house prices drop but we predicted that there would actually be a boom in the housing market as demand is high and supply has been low and also there is liquidity in the market and cheap cost of borrowing. We went against the masses back then and we were right. For this topic, our prediction is that the UK would be in a recession for nearly all of 2023 or at least until Q3 which we believe is the time when the rates would start to go down to increase economic activity.
How Should I invest in 2022 and 2023?
Our opinion on this is the same as any other time and that is quite simple. The aim always has to be to outperform the inflation and if you can, do better than that. Regardless of weather you are investing in real estate, stock market, commodities or blockchain, this always has to be the aim and with inflation soaring at around 8-9% and given the current stock market situation, it is a difficult task but one that is still doable. If this cannot be achieved, it basically means that over time the value of your investments or net worth will eventually go down to zero.
Best Strategy for Property Investment in 2022 and 2023
Here at Mason Verdi, we pride ourselves on our 100% retained customer base and the reason we have achieved that is because we have not put short term gain in front of longer term customer base build. We have always told our customers like it is and we believe this is the way to build a long term sustainable business with customers always returning and trusting our company. In the current climate, it is hard to find an investment for clients that ticks all of the boxes we mentioned before, having said that, it is not impossible. We always insist on dealing with this on a case by case basis as people’s circumstances differ and one strategy does not work for everyone. For the clients who are looking to raise finance from the banks, we recommend in the current claimant to either find a property that rental value outperforms the current and future high rates. Those are rare to find but we do have access to some. For the clients who have higher amount of equity set aside, we have better strategies and can show them strategies which work even better in a recession as we are in buyers market. If we cannot deliver those, we recommend to our clients to wait and ride the storm until we have something we can recommend that we are happy with and can make sure our clients will also be happy with not just in the short term but longer term as well.
What are the common property investment mistakes investors make in todays buy to let Uk property market. View here – https://youtu.be/Zw7Q21qFIrQ.
Mason Verdi is one of the fastest growing, property development & investment companies in the North-West UK. This company started life as sales agents and over the years has evolved into two arms of development and sales. Mason Verdi is a Liverpool based Property developer with track record in development in Liverpool and Manchester, northwest UK.
