COVID-19 PROPERTY GUIDE The property market is facing uncertain times due to Covid-19. Despite these unsettled circumstances, residential property remains an attractive proposition for medium to long-term investors, particularly those in the buy to let market. In some areas house prices have eased. This is in line with predictions which also suggest there will be a bounce back in 2021 as the impact of the pandemic lessens. One reason for this is the worrying situation facing many employees in certain parts of the country. Thousands have been made redundant and many fear for their jobs. Many, consequently, have postponed making their next purchase for the time being until the economy’s fate becomes clearer. This leaves the rental market as buoyant as ever, which provides a greater attraction for buyers seeking a bargain. Add cheaper borrowing, lower stock market returns and almost zero interest rates on savings to the mix, and residential property becomes a very attractive proposition. National and local lockdowns needn’t become a hindrance, whether for the first-time investor or the seasoned portfolio holder. Many properties can be viewed via a virtual guide and these 3D tours are available not just from estate agents but also from online auction sites, which now account for an increasing slice of the market. Whether you are buying or selling, the Government has advised that the process of buying or selling a house will be different in comparison to the pre-COVID-19 world and that you should speak with your solicitor in the first instance. Our Top Tips and Information for Property Investors during the COVID-19 Pandemic NEW DEVELOPMENTS – Housebuilders are allowed to present show homes and sell new houses. Some might be facing liquidity issues and it is worth attempting to negotiate on prices. RECOVERY – Prior to the pandemic there was a shortage of supply and increasing demand. The availability of decent property has declined since Covid-19 arrived. Consequently, when we come out of this health crisis demand will be higher than ever and prices may react accordingly. TENANT DEMAND – According to Rightmove's survey on the UK rental market, tenant demand grew by 33% in May 2020 when compared to the same time period in 2019. INTEREST RATES – The economy is under great strain and it is unlikely to pick up for quite some time. A low base rate is seen as a method of helping to shore up the economy, so it is highly likely it will remain hovering just above the zero mark for some time to come. Low interest rates will be here for the foreseeable future making it more attractive for investors to borrow. STOCK MARKETS – Share prices on most of the major European exchanges have come under severe pressure as a result of lockdowns. This loss of value and subsequent volatility makes real estate a safer option. GOVERNMENT POLICY – A slump in house prices is bad news for the Government, who will get the blame. Consequently, expect Ministers to do everything they can to prevent a prolonged downturn. There are a variety of incentives, like the Stamp Duty Holiday, at their disposal if they feel they need to kickstart the housing market. VIEWINGS – Initial viewings should be done virtually wherever possible. As a potential buyer you should avoid touching surfaces, wash your hands regularly, and bring your own hand sanitiser. ESTATE AGENTS –Ask the estate agent for a virtual viewing initially. If you are seriously interested in the property then you can ask for a physical viewing. LOCKDOWN EFFECT – There was a rise in demand when the initial lockdown conditions were eased. Many people wanted a change of scenery after being cooped up in their homes for so long and this led to an upturn in the housing market in some parts of the country. However, as Coronavirus starts spiking again and new lockdowns are introduced market activity will decline again, presenting good opportunities for investors. BUY TO LET Becoming a buy to let landlord is one way of achieving gaining a second income. This is particularly relevant during the Covid-19 Pandemic when demand for rental property is increasing. Due to the pandemic, many people are less likely to be able to afford a mortgage because job security may be an issue. Prices are expected to fall in the short term and prospective landlords will be able to benefit from good deals. In addition, the rise of online property auction sites has helped boost the buy to let market. These sites frequently offer properties whose owners require a quick sale, at prices normally well below market average. For most people, property is a long-term investment. Over the years, property values are generally expected to rise and at some stage in the future you will be able to exploit your investment’s capital growth. The combination of a healthy rental yield, currently enhanced by the Covid-19 effect, and financial security are just two factors which make the buy to let investment such an attractive proposition during the pandemic.