In spite of, or perhaps because of the current downturn, there is an ever growing number of Home Buyer Firms coming onto the UK market. These are either private individuals or companies who have arrived at the decision that, even with Home Prices sinking, it’s still a very much better bet to put spare money into Houses rather than leave it in a Bank.
The thinking behind this is straightforward enough. Hefty deposits in banks along with any cash belonging to companies are not guaranteed by government guarantees, so could in theory disappear if the Bank fails. Houses on the other hand can’t under normal circumstances disappear. It’s also unbelievable that their values may drop to anything like zero, and in the medium to long term, it’s highly likely that they’ll recover as the economic situation improves.
But, it’s simply too easy for the Home buyers to get carried away, and stock up more problems for themselves. Let’s just halt and think for a moment about what that phrase “under normal circumstance” means. Just as we are seeing big upheavals in the economic situation, we should also be aware of the potential changes in our real climate due to global warming.
These changes could have a devastating effect on the value, and perhaps the continued existence of any Home you may buy as an investment. The House Buyer who’s purchasing for an investment or as a safe home for his spare cash may be tempted to just look at the results of a good survey which shows the value and condition of the house along with any current threats that may affect it.
A “real” House Buyer who’s planning to live in the Home will look much more attentively at such items as coastal erosion, increased rainfall, old mining works, altitude, current and future industrial, commercial and Infrastructure developments, schooling etc. etc, and make his considered opinion about the effect of these during his lifetime.
Anyone lucky enough to be cash rich at the moment can be forgiven for keeping their eye firmly on the current downturn and its possible consequences. However, when buying Houses as an alternative to cash in the bank, you need to take the due diligence as seriously as though you were going to live in the Home.
To paraphrase: Let the Home Buyer beware! When people purchase Houses to live in; they make sure of all sorts of things; like current and possible future risks of flood, storm, landslip and other risks. It’s much too easy for those who buy Houses for investment to gloss over these aspects.
These types of purchasers often just watch for a call from someone in trouble to “Buy my House”. They jump on the opportunity with a minimum of effort, and get back to running their businesses. However, before I Buy Houses, I take as much care as if I was going to live there myself.