COVID-19: The opportunity for property investors

Hello readers. The past week has seen some extraordinary developments; all of which have happened so very quickly and even today, things have continued on a downward trajectory with the FTSE 100 dropping to a level not seen since the 2009 financial crisis.

This shock to the economy has caused many challenges for businesses, however what has the impact been to the UK housing market and what opportunities does this present for investors?

Apart from the obvious challenges with arranging viewings, analysts are warning that house prices could fall by as much as 20% if the government’s efforts to prop up the economy fail. According to analysis at markets gurus Jefferies, the stock market pricing is in a 12% fall in house prices already and a drop of 20% would knock a total of £46,900 off average property prices of £234,500, bringing them to prices not seen since June 2014.

But what does this mean for property investors and is now the right time to invest in property? The answer to this is, for those looking to buy, this dip in prices presents a fantastic opportunity as it will increase your buying power.

For those currently in the process of buying a property, you should reassess the environment and consider your options.

Is there the opportunity to buy at a reduced price or perhaps get a better deal and can you afford for it to remain empty for several months? The key phrase is liquidity is king. If you are concerned about the property being empty, perhaps ask for a delayed completion to help ease the financial burden.

In addition, the property would probably not sell in the next three months and the sellers would have committed legal fees, so as the buyer you are in a strong bargaining position.

If you can buy at a reduced price, this will mean that your mortgage payments will be lower, and you will have additional equity in the property when prices begin to increase again. In addition, buying at a lower price will help protect you from the risk of negative equity.

I am, however, very aware of the challenges that the current situation brings and am here to provide advice as you need it to help you weather out the next three – six months. Ideally, you would have reserves of three to six months costs, however, know that this is not always an option.

In my property journey so far, I have always balanced out risk with opportunity and, for those looking to invest in property, the coming weeks and months will show the trend for themselves.

I will be issuing a follow-up blog to look at this in the coming month or so. If you have any questions about your property investment, I will be happy to help. The best way to contact me is by email on hasan@home-share.co.uk.

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