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The Truth Behind The UK Property Investment Amidst the Pandemic

uk property investment truth

2020 received a major blow globally in terms of every probable sector. The investment market, the economy, and even health were on a toll last year. Global lockdowns became more common than ever and house confinement was the only option citizens were left back with. The pandemic surely made each one of us very familiar with our homes. But what it didn’t show was the real and the harsh picture of how the property markets would look once things start falling back to places. How well would the citizens be prepared to absorb the blow that will follow once they hit out of their homes?

The global markets were succumbing to turmoil right from the very beginning of the COVID-19 outbreak. But there were lesser implications on the property markets to be specific where the resilience was broadly high. As even in April of 2020, house prices in the major areas of the U.K. saw a spike of 8% where the rise of year to year nearly hit the $280,600 mark.

The property investors were pretty happy with the performance and they were looking out for the best ways to channelize this opportunity for attaining greater and the best returns. This had become the highly preferred avenue of investment for inland as well as foreign investors with about 35% of them preferring to pool down their money here rather than into stocks, bonds, or even gold. The market seemed to have quite a buffer to combat the risks that were yet to follow.

 

But what the major blow was that the construction was getting highly affected by the presence of the virus. It shuttered the flow of work and the existing supply crisis and shortage hit a major hike. As a result, the crux of the property markets began suffering. There were many issues rising in the light of the lockdown. There were uncertainties and we have tried listing down some of those uncertain aspects and what the future held for them.

Buying a Property

Standing in 2021, this is still a prudential investment one can easily look out for. Besides the risks associated with it, comes the better drive in the future. The global financial crisis of 2008 threw a knock of confidence in the property market which was much larger than the blow of 2020. The trends that follow today ensure the blow and the impact are not that huge, where overcoming the hit will be easier. In this decade’s hit on the market, the trends show the houses to be extremely resilient. The futures aren’t that gloomy and this is the best expectation for the investors. 

Keeping a note of the immediate implications, the broader and the brighter picture must be focused upon. The UK economies have slashed interest rates to encourage more bidders and investors. The cost of borrowing has come down dramatically. Achieving mortgages now are more affordable for investors backed with finances. Even the government is taking a look at the refurnishing costs. The transactions are already going up since the end of last year and this year is hopeful yet crucial for big-budget investments. The virus is here to stay, but life needs to move on. So do the investments.

Buy-to-Let Properties

These are what the investors are looking forward to. This being one of the greatest sources of passive income can never disappoint you. This mode of investment has always ensured to provide you with capital growth and price appreciation of your property. And the scenario did not even change during the pandemic. This is a property ladder that provides enough buffer to absorb your risks. The economic trends have escalated the trends to the point where these are the modes considered to be the best in an inflated market.

Commercial Real Estate

This had been into a high blow in the pandemic. The commercial institutions were nearly deserted to prevent usage by commoners. With the masses still advised against going in such properties, investors are pretty much reluctant to open doors into increasing their commercial portfolio expansion. The demand for these investments had taken a lower way of about 28%, the highest among every other investment options.

But there had been enormous credits to the ones who could take the leap of faith and plunge into the investments. Few efficient yet effective strategies helped them to survive this turmoil. One of those strategies was the BRRR strategy that investors prefer over everything. This strategy stands for the buying, refurbishment, renting, and refinancing of properties, from even overseas.

Buying

buying property in uk

For many seasoned investors, buying new properties amidst the pandemic didn’t seem to attract many hassles. With the right set of connections in hand, there were a lot of properties on sale in the entire UK. The right one needed to be picked at the right time. The properties, owing to the economic slurp were always available in the BMV (Below Market value) price range. But, getting loathed to the price alone would not have led you towards greater returns. Once while eyeing the property, the ancillary factors needed to be brought under concern too. The neighbourhood of the property, employment types, availability of amenities, presence of schools and playgrounds, nearness to the hospital, and transportation facilities are to be understood thoroughly to understand how greater value will you receive from your property. The rest of your team including the sourcing agent, the solicitor, and the surveyor needs to be contacted next to crack the deal.

Refurbishment

This must be planned ahead of your time to effectively let your property set out to fetch funds in no time. A pleasurable yet reliable team is demanded at this stage. This was great that the refurb teams did not affect the pandemic and wiser investors levitated this avenue to get their properties done real soon. The government also lend their hands to help promote investments.

Renting

Amazing contact of letting agents and them being in your team is a benefit you can hardly anticipate. Your property can get rented within even 24 hours in this pandemic-struck market if the right agents are there to save your back. Your agent will mostly schedule the probable meetings with the interested tenants to rent out the property. With everything settling down sooner or later, the best choice of your tenant can move into your accommodation too. You can choose the right set of tenants matching your ideas and you can run a background check right then. The pandemic forced employees to work from home and more tenants were looking to get accommodations that would suffice this need of theirs. If your property can serve its purpose, then what will be better than having them getting access to the keys?

Refinancing

The market had been open and there were endless possibilities of property acquisition from overseas. The best part about this was the ease of the refinancing that could be done with the dire help of the governments. With the interests getting lower and the mortgage getting loosened, your return from the investments can exactly help you to get the refinancing for this property as well as pool up capital for the next. With uncertainty prevailing in the market, it is your chance now to hit the bull’s eye.

The property and the requirement trends during the pandemic have seen a complete shift of the axes. The tenants are more inclined today to get a bit more living space than usual in the properties. They also have been fond of cosy outdoor spaces where the working couple can relax for a bit. Acquiring the properties without assessing the requirements of your target tenants will leave your property unaccommodated or undervalued. This is surely an aspect that you want to avoid. Hence, every investment during or after the pandemic must be backed by solid research and due diligence. Details of every aspect when remains handy with you will help both you and your team to get success out of this investment. And if you are an overseas investor, research must be pretty deeper for you. Any lack of coordination can lead you towards unanticipated losses that are unaccounted for.

The pandemic has already brought in a lot of uncertainties. Your idea of investment shall be the last uncertainty you think of. By remaining crystal clear with the shifts in the economies and the trends, you can prove yourself to be compatible enough to buffer any risks coming your way. Your plan must hold clearly about the unexpected expenses that might hit you amid the acquisition and refurb processes. Knowing in mind that this is a financial disaster going on globally, you must be open enough to accept everything, both favourable and unfavourable coming to you. But with the market prices hitting down, you might be able to get some good deals which otherwise would have been impossible. The days will always get better and you can always earn better returns.

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Fabrizio Cravero

Fabrizio Cravero

UK Property investor

Fabrizio is sharing his knowledge about investing in UK properties from overseas. He is based in Hong Kong and provides weekly guidance to his followers.

Fabrizio Cravero

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