Property Investment in times of uncertainty?
The Covid-19 pandemic is beginning to take a toll on the economy and has drastically affected our daily lives. However, in moments of crisis, some opportunities inevitably arise.
Over the past few years, the UK has faced a lot of uncertainty, with Brexit, the 2019 general election and the Swine flu (after this pandemic the property market continued to grow 10.1%) and now COVID-19!
This has caused many to question the strength of the property market. However, now that Brexit has finally come into effect since the UK’s exit from the EU in January, property prices were looking promising. The country is now facing additional uncertainty with the current Coronavirus pandemic.
One change that has opened a door of opportunity for investors is the cut to interest rates by 0.15 percentage points to 0.1 per cent, the lowest in the central bank’s 325-year history. Rishi Sunak, announced this reduction to help counter the intensifying economic crisis, caused by the coronavirus out
When the base rate falls, this normally influences mortgage rates. Many borrowers on tracker rates will benefit from a reduction. But those looking for new mortgages or remortgaging could also find cheaper deals from lenders.
While this may not directly impact UK house prices, it could be an incentive for potential buyers, homeowners and investors. Having access to greater leverage could be a key aspect to keeping the housing market moving during this time
We have been speaking with a wide variety of skilful and experienced investors since the coronavirus has brought the world economy to its knees. Most of them are forging ahead while exercising more caution and advising their partners and portfolio companies to do the same.
Selective Investors who are committed to the long haul have shown no fear and are going to stay in the market. Some of them will even be more aggressive to seize upon the bargain opportunities.
These investors are telling us they will keep doing deals, maybe not as many as planned when this year began. And they will invest in projects at lower prices than they usually would.
We have no crystal ball to predict the exact movements of the property market. We can only make decisions based on facts and the facts are that property is a tangible asset. When times are uncertain, tangible assets such as property have proven to be the safest place to keep your cash.
Property is seen as a relatively stable asset compared to equities, so it’s important to look at this from every angle when deciding whether to make a property purchase.
Property predictions as a whole show that by 2024, property prices are set to grow by 15.3% on average in the UK, with higher growth of 24% in the North West.
From an economic perspective, a cut in interest rates equals cheaper borrowing, this has a knock-on effect, mortgage payments are more affordable & purchasers are able to extend their budget = Capital Growth
The 10% drop in the value of the pound against major currencies will certainly lead to an increase in exports, this is the primary objective, however, a side effect is that the UK property market is the most desirable in the world for foreign investment.
Evaluate your income and prepare to buckle down and sit with your investments for the long haul. Wealth will return to its value after the pandemic has blown over, judging by what happening in Wuhan at this time, that could be in coming months. So, don’t miss out on some of the great opportunities available!
This Incentive is for a limited time only!