Home Truths About Property Investment During A Crisis
On the first day of January 2020, UK newspaper headlines were filled with optimism and hope – the Daily Express’s first page featured Boris Johnson’s promise for ‘Our Decade Of Hope And Glory and, The Independent stated that ‘A New Decade Dawns’. Fast forward a couple of short months and the country was plunged into fear and confusion which would, ultimately, result in a huge loss of life and a new recession.
Bouncing off the walls
With businesses on hold and a large number of people either furloughed or out of work, you’d be forgiven for thinking that there couldn’t be a worse time to invest in property – but that’s where you’d be wrong. In actual fact, many experts feel that the opposite is true. Historically, the UK’s property industry has always been incredibly robust and, despite a slump in the early part of the year, property prices enjoyed a resounding bounce back during July; seemingly defying all of the economic forces which were expected to pull them down.
In addition to this, there are a number of other factors which spell optimism for property investors in 2020, including:
Putting your stamp on the property market
In July, Chancellor of the Exchequer, Rishi Sunak, announced a stamp duty land tax holiday for UK home buyers. This break, which began on the 21st of July and will run until the 31st of March 2021, means that those buying a property valued up to £500,000 will not be subject to paying stamp duty. This, in effect, means that, if you’re buying a property for £499,999, you could save up to £15,000. Those looking to invest in property for Buy To Let will enjoy a reduced stamp duty rate of 3%.
The price is right
Although the property market in the UK is in recovery, house prices are still low enough to make investment a good idea. As more and more businesses get back to some kind of normal, a house price increase is predicted for the latter part of the year so investors would do well to take advantage of the current ‘lull’.
Lending a hand
Whilst some mortgage lenders are being understandably cautious during the fall out from COVID-19, others are offering favourable rates – particularly for first and second-time buyers including initiatives such as Family Assist. This means that property investment may be possible even for those who have previously considered it to be beyond their reach.
Under-supply and demand
One of the most compelling reasons to invest in property right now is that the UK is currently experiencing a significant residential undersupply. Whilst this creates a headache for renters, it’s a golden opportunity for property investors to grow solid returns and achieve great value.
Investing in property is, of course, never without risk and, as such, should never be undertaken without putting in the legwork in terms of research and affordability. Having said that, amidst all of the doom and gloom that 2020 has brought with it, this optimism will no doubt offer a chink of light at the end of the tunnel for those looking to invest in property.
You may also be interested in reading this article A Guide To Property Investment Due Diligence .
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