What Will Be the Scenario of Property Investment After Covid-19?
The UK’s successful Covid-19 vaccination program raises questions about the future of property investment post-pandemic.
This article examines the potential impact on the property market and investors, considering whether ongoing uncertainty will persist or if more stable outcomes are on the horizon.
Stephen Taylor Town and Country is one of the well-established property investment companies having a lot of experience in residential as well as commercial properties.
Let us discuss in this post the property investment scenario after we recovered from the recent pandemic in 2019.
Table of Contents
- What the scenarios appear now?
- A few predictions about this market
- Future of property investment
What the scenarios appear now?
The Covid-19 pandemic and Brexit have recently introduced significant uncertainty to the UK property market. While Brexit-related uncertainties cleared with the UK/EU withdrawal agreement, the pandemic became a new concern.
Initially, the property market faced a temporary freeze during the first lockdown in March 2020, but by April, property prices saw a 2.4% year-on-year growth.
The rental market also thrived as remote work encouraged renters to seek more suitable accommodation, increasing demand for spacious properties.
However, specific sectors like retail, hospitality, and leisure suffered, leading to sectoral polarization. Despite uncertainties,
property investment remains resilient and presents opportunities for savvy investors, with predictions of over 21% growth by 2025, especially in the North West.
A few predictions about this market
Prices may dip and bounce back again
Property market headlines have been unsettling due to the lack of data during lockdown, but interest and traffic remain high. Expectations include a market dip in 2020 followed by a recovery in 2021.
The ‘value for money’ sweet spot will be reached by prime real estate
High-end property prices often experience exaggerated drops during economic crises. COVID-19 may create opportunities for cash buyers in the prime market as prices decrease.
Foreign buyers will support maintaining the market’s vigour
To offer stimulation to the UK economy, government will try to encourage buyers from foreign countries like:
- Asian countries
- Middle East countries.
Suburbs will keep becoming more and more popular
Interest in suburban areas like Wanstead will likely rise as people seek more space and value than central London zones.
More space for remote working
Properties with space for home offices will be in high demand as remote work continues, with homeowners valuing dedicated workspaces.
Home improvement demand will soar
Homeowners are likely to extend their homes to create space for remote work, and home improvements will become more common.
Viewings will change
Virtual property viewings have become popular due to social distancing and may continue even after lockdown.
Future of property investment
UK house prices reached a record high in August due to factors like the stamp duty holiday and increased demand for larger homes with remote working needs.
While this artificial price increase has raised concerns, some experts predict that the market may not crash immediately.
Economist Fred Harrison, known for correctly predicting past property crashes, anticipates continued price growth until a crash in 2026, followed by a recession.
Investors have varying strategies, with some increasing exposure before the crash, while others consider alternative investments until the market correction occurs. The future of UK property investment remains uncertain, balancing potential gains and risks.