Hello folks. Welcome to my series on the
housing market, and the general political situation, and how
to steer your way through what, for most people, is the most
puzzling and expensive deal one is likely to undertake. What
has 2021 got in store for us? Let's get underway with some
thoughts on real estate.
We have just gone through a rather remarkable period, and we
are warned that worse is to come. The main argument is that as
so many world economies have been wrecked not by the virus but
by the futile and idiotic responses to the virus by so many
governments that, in order to cope, vast sums of money have
been created out of thin air to deal with the consequences of
lockdowns and shutdowns, that this will cause problems in the
The main conclusion is that all this money creation is going
to cause massive inflation some time down the road.
The other conclusion is that all this "borrowed" money is
going to have to be paid back. Who is going to pay it? In
effect we have borrowed from the future.
There is another conclusion, namely that a debt jubilee will
have to be declared. What will that mean? And what is likely
to happen to real estate as a result of the current financial
In order to work out what is likely to happen next we need to
go back to basics.
If you listen to the Johnny-Come-Latelies who are setting up
to tell you what to look for, and why, you will get a false
view of what is happening now, and what is likely to happen
next. Most of these self-promoted experts have been in the
business for a decade or less. They know nothing about how the
property markets work. They follow the wrong metrics and end
up with screwed results. Whereas I have been in the business
for a lifetime, and have successfully called the path of house
prices and patterns for the past fifty years. Show me anyone
who comes close. You can't. In fact, rather a lot of the
metrics I use successfully were invented by me.
Let's look at some of the ways we need to look at what is
going on in the housing market (and some of the ways one
should most definitely NOT look).
Over the course of the next few videos I am going to analyse
the real drivers behind house prices, values, valuations (not
the same thing at all), trends, and ways to goose the market.
For instance, I will go into detail about the following
1 There are several housing markets, the
commercial market and the domestic market, and at certain
points in history they join. Not only that, but there are
those who treat houses as a commercial activity or as a route
to a pension, and those who treat their house as their home.
These distinctions are important, and most people ignore them
because they dont see the disparities and connections. There
is NOT just one housing market.
2 The important metrics to watch to see where the
market is going, and, of course, those to ignore.
3 How to value a house as opposed to being told by
an estate agent the price of that house. There is usually a
massive difference, and if you dont know how to value real
estate you will quickly go bust, or end up paying way over the
odds for any deal.
4 The reason a good knowledge of maths is crucial
to being successful where buying and selling real estate is
5 The kinds of things that go towards creating
housing booms and busts.
6 How to value money, and set that value against
the value of land.
7 How the government interferes with the housing
9 The rise of the digital world and how that is going to
affect house valuations.
There will be more topics, but that gives you an example of
where we will be going over the next few weeks. And I hope you
will come along for the ride.
If you are interested in real estate you should have heard of
me. If you haven't, no problem, here is a quick résumé.
I did my first property deal back in the sixties when I was
barely a teenager. My mother wanted to buy a plot of land to
build a house. She was having serious trouble doing the
calculations. And that is where most people go wrong in real
estate, they just can't do the maths. Actually it can be quite
complicated working out how things go. However, since I was
keen on algebra I started using algebraic functions to solve
problems, and ended up with two or three very simple equations
which showed how the deal mother wanted could be structured to
make a profit.
Mother took me and my equations to the bank. The bank manager
looked at the equations, looked at me, and said sweet things
to mother, and that was the end of that. In my naivety I
thought bank managers were clever, and understood maths.
Obviously I now know better. I have watched as bank policy is
to withhold funding when houses are cheap, and splash it
around when houses are expensive, thereby showing that bankers
have no grasp of simple maths or business.
It was some time before I realised that bank managers are
there to manage the bank, not the money. They don’t understand
money or deals. They are not the guys to go to for help over
I learned two valuable lessons from this first failed deal.
The first was that to get on you need to bypass fools. The
second was that there is always another deal coming along
behind the one you missed.
Fast forward a few years, and I have a wife and a son, and we
are looking to move. This time I am ready for the bank
manager. I am also older, so he wont look a fool if he doesn't
understand my reasoning. But I make sure he does understand.
He still wont lend me any money, but he lends it to my mother.
We buy a ruin in deepest Somerset. We move in. We are young,
poor, keen, inexperienced, and the next two years are hard
I learn to be an architect, and draw plans for renovating the
house. I learn about surveying, and read up how to make
cement. I then take on renovating the old cottage, and
building a substantial extension on the side.
I do everything from digging the footings to putting on the
chimney-pot. I rip all the old stuff out, put in new plumbing,
and completely re-wire all the electric circuits. I then
decide that although I hate building, it is making me money,
so I build another house, this time from scratch.
I started my business for real in 1971, and have predicted
every top and bottom in both the UK property market and the
Spanish property market since that time. I have also built
five houses. And by that I mean I have pushed the wheelbarrow,
drawn the plans, dug the holes, laid brick walls, put in the
electrics and the plumbing, and done everything from the
planning application to painting the name-plate on the gate
when it was all finished. In short, I know everything there is
to know about houses and land for the simple reason that I
have been there, done it all, and got my hands dirty over the
course of several decades. I have even obtained land by
adverse possession (squatting), and I've done that in both the
UK and in Spain, and the methods used in each country are
I bought UK property in the early seventies, and sold just
before the crash. I got the new wave bang on time, and must be
one of the few guys who bought the stock market for new time
on an amazing Friday when the FTSE was at 141. I followed that
with a plunge back into the property market. I was out before
the next crash, and back in again in the eighties. Meanwhile I
bought in 1971 in Spain, right next to King Saud's spread on
the outskirts of Marbella. I sold three years later during the
crash for a 40% gain because I entered into a pre-sold
contract, knowing the crash was coming.
I spent weeks telling everyone who would listen to get out of
the market in the late eighties; very few paid any heed to my
warnings. I was back in again in 1991.
If you want to check out how I started buy-to-let, and how the
maths stacked up back then, and how the banks were useless
then too, check out the appendices to my book, The
Ultimate Real Estate Guide
, available from Amazon: https://www.amazon.com/dp/B07D3ZW8D2/
I have had an online presence since the start of the world
wide web, and my first property website was up and running in
a somewhat ragged format in 1993. It morphed into The
Unique Property Site
in 1995. It is the longest running
property website in the world.
Ever heard of Buy-to-Let? Of course you have. But did you know
that it was me who invented the scheme, back in the summer of
1991? Together with an old college friend we set it in motion
in Hastings later that year. The way it started and how much
money the system made is recounted in that book I mentioned
Once we had the system up and running successfully for a year
I wrote a book about it. That was version one of the
aforementioned book. The original was called Buying to let -
Your Pension. Not a single publisher would touch the book. All
of them told me buying houses was stupid and could not
possibly be the basis for a pension. I therefore published the
Three years later, the banks, previously fiercely against the
scheme, suddenly decided that buy-to-let was a great idea. Yet
another example of how the financial world was, as usual, way
behind the curve.
But that's enough about me. If you want the tools to get stuck
in and always be a success, then make your way to the next
And do click the button to like this video, and if you want to
be alerted to my next videos, and other updates concerning the
world of houses, do let me know and I'll put you on my mailing
Okay folks, see you in the next instalment.