We are still in the very early days of the coronavirus (covid-19) outbreak in the UK, so it’s impossible to say right now how coronavirus will affect the UK property market.
At the beginning of 2020, the UK property market was looking exceptionally healthy. House prices had risen for the first time in two years, Rightmove reported their healthiest January on record and Sterling was recovering its losses against other major currencies. This post-election bounce is unfortunately fading as coronavirus safety measures hit viewings and buyers and sellers reconsider their plans to sell or stay put.
The Bank of England have cut interest rates to the lowest level in history, reducing the base rate from 0.75% to 0.1% as coronavirus causes plunges in stock markets across the world. In addition to this, the government announced extra measures on Friday to help mitigate pressure during these uncertain times, these included:
- The government is to pay 80% of wages for employees not working, up to £2,500 a month
- VAT payments by companies are deferred until the end of June
- Interest free cash grands to small businesses
- Self-assessment income tax payments for July 2020 deferred for six months
- Increase in standard Universal Credit of £20 a week, with the same rise for those still on the working tax credit scheme
- Nearly £1bn for those struggling to pay rent, through increases in housing benefit and Universal Credit.
We understand that this is a worrying time for a lot of people, and we want to reassure you that the safety of our clients, colleagues and partners are of utmost importance to us. Our team of Property Consultants have been fully briefed on how to minimise the impact of Coronavirus (Covid-19).
As it stands, our office is now closed for business. However, our team are working remotely and are fully contactable for any enquiries or questions during this time. Our secure IT systems are enabling us to be able to work and give our teams what they need to continue to deliver a high quality service to all our clients.
Would now be a good time to invest in property?
Undoubtedly, we’ve noticed a change in market behaviour with some of our investors moving their capital to the property market from stocks, while others have shown hesitancy towards investing in property at the moment.
We understand this uncertainty. Investment sectors will certainly suffer during this global volatility; however, to put your mind somewhat at ease, the property investment market is one of the oldest and safest investments around. During political instability over recent years, the Manchester property market has come out on top, which is a testament to the strength of the market.
If you’re considering a buy to let investment, go for one that has a fixed rental guarantee. A fixed rental guarantee will eliminate any doubt about whether you’ll make your money back and you will receive a regular income.
Warren Buffett once said “be fearful when others are greedy and greedy when others are fearful.” – Despite the uncertainty around coronavirus and current economic climate, for overseas investors, this opportunity may not come around again.
To our investors moving their capital into property market – before you make any decisions go back to your investment strategy, review your exit strategy and make sure that the decisions you’re considering now are in line with your long term goals.
If you have any questions regarding the best way moving forward in current situation get in touch today and let us know about your investment strategy and circumstances, we will be happy to advise.
On behalf of all of us from Beech Holdings, we wish you, your families and your businesses well at this difficult time.