Property Investing is Supply and Demand Even with Covid 19
Property investing has always been and will always be Supply and Demand. We are both buyers of property to refurbish & supply to social housing entities and councils as well as to maintain liquidity we sell ready made, tenanted high yielding properties on long Govt backed contracts plus we have some HMO properties in Article 4 areas which basically are closed for any new HMOs in the area. These prices will go only one way. Supply & demand again.
The reality of what is happening now has several facets. The UK has had a housing crisis prior to Covid 19. Covid 19 is worsening the housing situation. There has been diminished demand yet at the same time pent up demand.
However the most important issue is lack of supply.
You do not have to take my word but for the following markets there is less supply than I have ever seen over the last 5 years.
We have 8 more Asylum seeker properties either in Legals or Refurbishment to provide eventhough the areas at the moment are closed to density issues. All of our other properties are under offer from a Family office looking for long term stable yields. More than 850 Asylum seekers have arrived since the lockdown. The providers are being forced to put them in Hotels.
In order to keep on growing and providing housing we are working with councils and Govt backed Housing associations to provide more properties. Due to the Covid 19 Crisis there is now even more demand.
An excerp of an email.
Good Afternoon Ruti & Shneur,
I hope you are all well. Apologies for missing your calls today – It’s been non-stop chaos!
Our needs have expanded even before this lockdown, in all honesty, the lockdown has made us extra busy on our council projects specifically domestic violence and homelessness.
Any 1 or 2 bedroom properties within XXX are in demand – please avoid XX & XX postcodes.
HMO’s in XXX will definitely be needed post-lockdown, however, the asylum contract in these areas has quietened down considerably at present.
We have tried to re negogiate our purchases however to no avail. Sellers are not budging and know there is very little on the market. Plus we are not buying in London rather in areas where prices have not superceded 2008 prices. We have had two buyers either lose money in the stock market & pull out or simply try it on. However it is supply and demand. We have alot of demand and needs to supply going forward yet not alot of supply in the market.
8.9% NET YIELD- 10 year term lease with appointed representative of the HOME OFFICE
…Where can you find this in the UK?
No voids..No management..Maintenance
NO council Tax!
There has been a 5 year contract….however now there will be a 10 year going forward from Dec 2019….no voids..no management….and maintenance is covered up to 5,000 per annum. There is a vast shortage of housing for these type of people as well as recession resistant…We sell these for cash as banks are not keen to lend on them….
com/article/6269829/Serco- wins-pound1-point-9bn-UK- government-asylum-seeker- contract.html