Nobody saw the Covid-19 pandemic coming.
It has certainly affected the UK property market.
Is it still possible to get involved in property investment projects with the Covid-19 pandemic still raging in the UK and across the world?
I am going to share my thoughts with you in this post about what is possible with property investment during the coronavirus pandemic. If you have read any of my other posts, you will know that I am a positive individual who believes that anything is possible.
However, I am going to be totally honest with you here. The Covid-19 pandemic has affected my property investment business in a negative way. Nevertheless, I haven’t been sitting around on my hands complaining about everything.
Don’t be a complainer – it will not get you anywhere. When you complain you use up a lot of energy and fill your head with negative thoughts. It is not a place that you want to be.
In these unprecedented times there is always hope. You will learn in this post that the UK property market has been surprisingly resilient throughout the pandemic. That’s not to say that things may take a turn for the worse of course.
I believe that 2021 will be a much better year for property investors than 2020 was. They have developed a vaccine for Covid-19, and the first people are receiving it as I write this post. Getting back to some kind of normality is really good news.
UK House Prices
As I said before, house prices have been remarkably resilient in the UK during the pandemic. For a long time, there was virtually no activity in the housing market. Then came the first break from lockdown and a surge of transactions during the summer months.
Many people, including property investors, had been waiting for the chance to move forward with their property plans. This resulted in “pent up” demand, which was unleashed on the market with the lockdown easing in the summer of 2020.
As a result, house prices in the UK continued to rise. According to the Halifax House Price Index house prices increased in November 2020 more than 7% higher than in November 2019. This has confounded many experts who all predicted that there would be a sharp fall in house prices by this time.
Now the experts are saying that the first quarter of 2021 could see a fall in UK house prices with a possible “bounce back” after this as more and more people receive the coronavirus vaccine. It will be interesting to see how this turns out.
One thing is for sure, it is all pretty uncertain. Of course, for property investors it is far from the end of the world if house prices do fall. You can then look for properties available for a bargain price for your buy-to-let portfolio for example. It is all relative, and there is every reason to be optimistic.
I always keep a close eye on house prices and I recommend that you do the same. However, it is not the “be all and end all” as to whether I proceed with a property investment project or not. Property investment is a risky business and house prices can go up or down. The strategy that you use is an important factor.
If you are in property investment for the long term, which I highly recommend, then you should be able to ride the waves of rising and falling house prices successfully. Demand for private rentals is stable and even increasing in some areas. So use the right strategy and forget about trying to turn quick profits.
The Lockdown Syndrome
At the time of writing this post, the UK is in a three-tier lockdown situation. Some areas of the country have very high coronavirus case numbers and as a result, they have the most restrictive lockdown arrangements at Tier 3. Most of the country is in Tier 2 lockdown, which is still fairly restrictive.
If it is not possible for you to perform property transactions, where you live then spend your time planning your next profitable property investment project. We are fortunate to live in an age of the Internet and the ability to use resources online to find the information that we need.
You should always be planning your next move in property investment whether there is a pandemic in force or not. I don’t know where you live and what restrictions you currently face, but I do know that you can plan for your future property investments. So don’t waste your time as the rest of the population are probably doing.
Lending is available and cheap
When the coronavirus pandemic first took hold in March 2020, most lenders reacted in a “knee jerk” way and started to restrict their mortgage offers. Trying to obtain a buy-to-let mortgage for example was almost impossible during this time.
Now things have changed for the better. There are many mortgage products available and a lot of good deals on offer. Interest rates have remained at an all-time low and it really is a good time to talk to your mortgage broker if you have specific property investment projects in mind.
Some lenders have kept restrictions in place with certain mortgage offers. It is still not easy to obtain a buy-to-let mortgage but it is certainly possible. I cannot emphasise enough the need to have a good mortgage broker on your team.
You could decide to wait it out and keep your money in the bank. However, the interest rates are so low that you will hardly make any return on your money if you do this. So it is a smarter decision to see what is available in the property market even when Covid-19 is still rampant.
Stamp Duty Holiday
You will probably already know that the UK government has a stamp duty holiday in place until the end of March 2021. Some property investors are speculating that they will extend this holiday as a way of keeping the economy going during the pandemic. Nevertheless, this is far from certain so I recommend that you take advantage of this now.
If you act now and purchase a property, you stand to save a great deal of money on stamp duty. You can use the money that you save to invest in renovating your property or putting it towards your next property investment project. Although many experts are predicting an extension of the stamp duty holiday, I would certainly not recommend you rely on this.
Demand for Private Rentals still increasing
Among all of the doom and gloom surrounding the coronavirus pandemic, demand for private rental properties continues to remain strong and increasing in some areas. People need a place to live and even if the house prices fall slightly they will still not be in a position to purchase a property of their own.
What you may have to do is look at different areas of the country for the best rental yields and house prices. You may not be able to visit these areas right now but there is plenty of information online about what areas are performing the best.
The North West of England seems to be performing very well now, as do some areas in Scotland, the Midlands and Wales. So do your homework to identify which areas you need to make property investments in next.
Going for buy-to-let properties right now makes the most sense. Demand is still there and if you find a property in the right area, you can end up with a very good long-term investment. Remember that some property investors will be doing nothing now as they feel that the coronavirus prevents them from making a move.
Get moving during the Covid-19 Pandemic
I hope that I have convinced you that you should not wait around to make your next profitable property investment during the pandemic. If people want to sell their property at this time they are likely to be more willing to negotiate a deal with you. This means that you can end up with a property below market value.
You need to check out what is and isn’t possible in your area. Are estate agents and letting agents still working? If you purchase a property that requires renovation, will you be able to find good trades people to complete this work for you?
I never believe in sitting around no matter what is happening in the world and I don’t recommend that you do this either. See the coronavirus pandemic as an opportunity rather than a threat. Always stay safe while you are doing this.