Whilst many would assume the lockdown measures introduced across the UK would see the property market grind to a halt, in the todays tech world, activity is continuing in the sector.
Behind the scenes, there is much that can be done that is keeping the market moving. Here are why investors can utilise this time to support their property portfolio.
Activity is returning
Recent data suggest we have had a fall in house prices closing the first quarter of 2020. However, there is evidence that activity has returned to the market. Whilst transactions themselves are not likely to rocket until the lockdown restrictions are lifted, people and businesses alike are thinking outside the box to keep market activity going.
Property buyers are utilising this time to continue their property search. According to most property agents, house searches can take up to six months, with two months considered a ‘short period’ of searching.
Research into the right location and property type often takes months of house viewings alone. Investors are therefore not only continuing their search online but using the technology available to them to ensure they can move quickly after lockdown.
Of course, the practicalities of buying and selling in the current climate is challenging. With the coronavirus lockdown keeping building sites closed or significantly slowing production and physical property viewings becoming an impossibility, lenders began to withdraw product offerings. This applied over to conveyancing also.
With the reopening of building sites now into force and more and more returning to work, albeit following COVID19 best practices to best avoid the spread of the virus, the construction sector is back in business.
Agents and investment companies
Estate agents and investment companies have adapted to ensure most of their practice can be completed online. Many companies in the property investment sector, particularly those in the loan note sector work mostly online and simply require the construction industry to continue to allow these companies to work mostly as normal.
Virtual viewings will very much be touted as being popularised through the current lockdown and is very likely now to continue beyond the pandemic. Whilst virtual viewings were already in practice, they are more popular now than they ever were before. Buyers from overseas and those that have simply learned the ability to function better online will certainly utilise this at some stage in the buying or selling process.
Agents are claiming they have seen their highest number of ‘blind’ cash offers being made on behalf of investors having negotiated a good deal for both parties. Based often on just a virtual viewing, the trust in bricks and mortar remains high.
Perhaps the biggest hurdle that faced the property market surrounded lenders. As the lockdown initially came into force, lenders removed products to reduce risk. However, with construction returning, so too are we seeing a revival in lenders offering greater products.
Many lenders are incorporating online and digital processes including mortgage valuations themselves. With the market beginning to see options again, those keen on borrowing will have the options available to proceed with a purchase.
Learning from the past
The UK housing market was off to a strong start in 2020. With the Brexit saga mostly behind us, the clarity of the UKs position gave investors’ confidence, what many people called the ‘Boris bounce’.
The mortgage market had become competitive and house prices were seeing healthy growth as well as high rental demand. This would suggest that the market is poised to recover when the lockdown measures are eased. Many organisations and individuals are adapting well to the ‘new normal’.
Predictions for the close of 2020 suggest we could see as much as a 13 percent fall in house prices from the start of the year. Whilst this is possible, many experts are saying this is a ‘worst case scenario’, with similar predictions in recent years surrounding Brexit also not coming true.
In fact, a vote to leave the EU in 2016 predicted a 20 percent fall in prices two years after the vote. Of course, this was not the reality, and with Savills still predicting a 15 percent rise in prices by 2024, there is certainly reasons to be optimistic about the future of the market.
Property remains a secure asset
With other investments in stocks and shares being majorly adversely impacted by COVID19, property investments has remained resilient. Not only have property investors realised a relatively small dip in prices, but they hold the physical asset that is likely to see some growth in the coming years.
Property is one of the safest forms of investment you can make at this time. Whilst we have experienced some short term volatility, historically property remains a secure, profitable asset for those smart enough to enter the market.