My 20 year property returns

I was pleased to have reached the 10 year point of tracking my investment portfolio last month.

But my net worth includes an important asset class – property – that I don’t normally track, but which I have held in some form for over 20 years.

So, this post takes a look at how my property assets have performed.

Property works completely differently, for me, than my investment portfolio. For starters, I have never bought a home as an investment. But let’s start at the beginning.

My property owning history

I nearly got on the property ladder in the mid 1990s.

I hadn’t realised, until a friend pointed it out a few years too late for me, that in fact one of the easiest times to get on the property ladder was the moment when I graduated and moved to London. My first job earnt a reasonable London salary of just over £20k, and 1 bed flats in a reasonable part of Zone 1 in London were available for under £70k (now £800k-£1m, sigh).

Mortgage rates had dropped from >13% in 1990 to around 7%. The interest costs could have been around £5k, a quarter of my first-job income. That was in the mid 1990s. It didn’t occur to me to buy a place, and of course those property prices were so high…..

By the late 1990s, buying a property had become a lot harder. But once I was earning £40k+ I decided to take the plunge. I found a reasonable 2 bed place very close to Zone 1 for £200k (now £500k). The mortgage (at around 7% interest, i.e. interest costs were £13k, a third of my gross income) and the deposit (£20k, if I remember rightly, for a 90% mortgage) were a massive stretch….. and then I was gazumped. By the time I reorganised, the places I wanted cost £220k+ and I couldn’t quite afford it.

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Jan ’23: Mr Market defuses my tax bombshell

January is always a miserable month to be in London. Thankfully I managed to get away a bit during the month (not to Davos, no), and enjoy myself in London despite the wintry weather.

What you’re paying for in Mayfair these days

Market movements in January

The markets on the other hand were positively hot. There was some general sentiment – in Davos in particular from what I read – that the doom/gloom of Q4 was overdone. Inflationary expectations are declining. And markets, as a result, lifted dramatically. Equities and bonds rose markedly everywhere. In constant currencies, the markets I’m exposed to (with my leverage included) rose 5.0%.

Market movements in January, in constant currencies

The GBP rose slightly against the USD, and dropped a bit against AUD. On balance, foreign currencies dropped 0.94%. So my index rose 4.0% – the currency movements taking a small dent out of the constant currency figures.

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10 year review

Wahoop! I have made it through ten years.

In fact, I’ve had a trackable portfolio for over 20 years. But 10 years ago I started tracking my portfolio in a consistent, monthly way – unitising its performance so I could measure its return. It wasn’t until 2015 that I started this blog, but since then I have been reporting monthly on the progress / setbacks I’ve made/encountered.

I have taken a Bogleheads performance tracking spreadsheet as the template for my own portfolio returns tracker, and that template has had a ’10 year’ row staring at me with a #N/A for the last 10 years. No longer!

In any case, I will loosely follow the format I’ve used for the last couple of years. I’m looking at seven generic questions that I think all prudent investors should ask themselves at least annually.

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