Covid 19 Pandemic Property Market Predictions
From complete property collapse to bidding wars on property. This is the craziness in the UK property market at the moment. All are waiting to see what happens in the fall with the end of furloughs and unemployment. Everything has been thrown into the chaos of anxiety and uncertainty. It was tough to tell how exactly it would all come out in the wash. The pandemic is not yet over, we can look ahead to the future and glean a bit of hope from the property market and us as propertyinvestors. As we are constantly buying and selling we are in contact with estate agents in numerous cities. The general consensus is BUSY. Busy like never before. Tremendous demand from investors and first time buyers. We have a property we are trying to buy to turn into a 5 bed social HMO and as much as I hate bidding wars, I am in one. We bought an adjacent property last year, turned it into a 5 bed property generating 15,600 a year net. We recently sold that social HMO 5 bed and looking to replace it to either keep for our long term portfolio or sell on to enhance liquidity. We like the model of Kevin Green in which he keeps one and sells two or keeps two and sell one. I love keeping yet my husband pushes me to sell all the time.
Promising Predictions for the UK Property Market
What I see is that people are moving into more of the suburbs and even cheaper areas like the North East. People learned they can work at home. They do not need to packed like sardines and commute for hours on end. Areas in the North East provide quality housing and quality of life. That is why we are seeing a pricing shift. In 2014-2015 we were buying in Salford Manchester and it seemed virtually no one wanted those terraced houses. We were buying the 50-70k range. Today they are 110-120k. In property you need to think ahead. That is why we are buying in Blackpool and the North East.
Property has been more than stable. Plus we have a very long term outlook. This is the key to property success. We’ve also seen that, by and large, home prices have remained remarkably stable. Even though there was a significant dip in property transactions, the prices of properties have not significantly changed from their expected growth trajectories. Naturally, this is good news. With expectations of a recession (and the reality of one, now), there were fears that we would see the drastic drops in value that we saw during the Great Recession. So far, by and large, this has not been the case. As I said earlier, bidding wars are more common than price reductions.
While a suburban surge is expected, we also anticipate growth for secondary and tertiary markets. Primary markets will no doubt struggle such as London or Birmingham — dense populations and high costs of living will deter growth in the coming year. Secondary markets, however, will continue to attract populations looking for greater affordability, particularly as employment concerns grow ie the North East. We are buying below 2008 prices. As well as buying below replacement value. In addition to a likely shift towards more affordable cities, we’re likely to see an increase in single-family renters. With population density and neighbor proximity bringing about health concerns, renters will be looking for the distance that can be afforded in single-family rentals in secondary and tertiary markets, where their money will buy more square footage and space between neighbors.
This creates the perfect property investment for us.
What do you think?