What does coronavirus mean for property investment?
By: Sarah Roberts
Tags: Covid 19, Property Market, Property Investment, Coronavirus, Economy

Photo by Fusion Medical Animation on Unsplash

In light of the recent COVID-19 pandemic, there is an understandable uncertainty among the British public and those who invest in property for what the future holds. Despite many questioning whether property prices will continue to rise and how capital growth will be affected long-term, the property investment market remains strong throughout it all.

Since the current coronavirus pandemic started to impact countries worldwide, the global stock market has also plummeted, which is cause for concern for those who invest in UK property and what it means for their investment. However, the UK property market remains one of the most robust and lucrative investment journeys for any investor who wants to make returns despite global happenings.

As an investor or someone looking to invest in property soon, you may be curious to see how coronavirus will impact the current property market in both long and short-term. Plus, it’s interesting to see how the market has held up over term despite economic uncertainty…

The Current Property Market

As it goes, the property market in the UK right now is a stable and secure investment. This is because, unlike other investment types, bricks and mortar are one of the safest places to keep your savings and cash. While the property market may have had an initial decline (which is only minute compared to the likes of the stock market), investing in property is about more than a quick cash grab. Essentially, property investment will give an investor returns over 5/10/15 years (even longer if you’re willing to wait). However, COVID-19 and other economic uncertainty are only for a short period.

The evidence of the property market continuing to soar in the long term can be shown by looking at property price growth over the last decade and looking at predictions for the future. For example, property prices in Liverpool have increased from around £45,000 in January of 1995 to £149,500 in January of 2020. This 25-year period has seen a change of +227%, which is a huge profit and gain for anyone who has had a property investment during this time. Additionally, these prices are set to continue to rise in Liverpool with predictions that North West property prices will grow by 24% by 2024.

Investing in UK Property

The one aspect you must understand about UK property and investing during coronavirus is that it’s still essential you look at the best places to invest. For a long time, people have considered London the main UK city for investment, but now, investors are flooding up North to get better property prices, and capital growth yet still the same tenant demand. Cities like Manchester and Liverpool have seen a surge of investors wanting properties there and making a success of this.

In Times of Uncertainty

How do we know that the property market will continue to be a long-standing and stable investment for an investor despite uncertainty? While predictions show a huge increase in property prices, looking back over the last decade, we can see how robust the UK property market has been and how it has continued to thrive and blossom into what it is today.

An example similar to the COVID-19 pandemic is when there was a global outbreak of swine flu in 2009. This pandemic was first identified in Mexico in April 2009 but rapidly spread from country to country. During this time, property prices in the UK continued to rise by over 10% (between 2009 and 2010), which highlights the strength and resilience of the UK market.

In times of uncertainty, the property market may decrease, and property prices do tend to reduce in value for a short amount of time. This is only understandable with how much the economy is impacted. Yet, despite these small decreases and reductions, the property market always comes out on top. Unlike the stocks and shares market, in which people lose thousands of pounds every day due to decline, property investment is something a lot more trustworthy and worthwhile.