Will the Covid Property Boom Last?
It’s been apparent for some time now that the property market is recovering, not only that but it is really booming in some areas such as the North West. Property has always been a great market for investment, it’s had its issues over the years but has always come back to prominence for investment.
Why the Boom?
Pre-lockdown, the property market was doing well. There was investment from both within the UK and Overseas as well as first time buyers and property owners looking for new property. Government incentives were driving good sales as well as investment in areas such as the North West to make property values increase over time. Lockdown changed that though, with the uncertainty it brought to stock markets, jobs, and business trading across not only the country, but the world.
There has also been significant world events that have caused some caution among buyers, the issues in Hong Kong in relation to censorship which has resulted in mass protests, the US going through possibly the worst hit pandemic area, wildfires throughout Australia and then the Pandemic. Investors have been frugal with their funds across all areas, not just property. However, if the pandemic has taught us anything, it’s that passive income is incredibly important. There’s been record levels of unemployment and problems across the globe what with redundancies and people being put on furlough – so having a side income that allows people to passively accumulate income if there are issues with their main income. New Stamp Duty regulations have also come in, meaning now is a great time to invest and take advantage of lower stamp duty rates for your property.
As a result, coming out of the other side we’ve seen a huge uptake in our investment properties.
How does this look going forward?
With huge regeneration projects underway across the UK, property values are increasing all the time. We’ve recently shared (below for reference) how the property market is expected to fare over the next 5 years. There are areas where prices look to have plateaued such as London, but predictions are that the North West is expected to rise by around 25% within the next 5 years. Excellent news for investors!
Property values have skyrocketed across the UK since 2015, we’ve seen areas such as Manchester continue to develop and increase in value – this has meant that it’s priced some investors out of the market with yields declining slowly. There are higher yields in other locations around the UK but are much more difficult to manage and tenant. There is high demand for property in Manchester and this serves that need.
Should I invest now?
Yes! There are no blockers to investment other than a level of global uncertainty but we have spoken to investors who are confident in the market and the continued efforts of developers to ensure their developments are completed. The property market is robust and has shown that although the period between March – June was somewhat turbulent with people avoiding large investments, the market has since recovered to levels seen pre-COVID and is making strides towards the prices predicted.
There are savings to be made too – if property is purchased before the Stamp Duty goes back to normal, investors can save a good chunk of money, making the investment more cost effective now than waiting until next year.
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