As UK property investors we have had a lot to contend with recently. There has been all of the Brexit uncertainty and it seems that we finally have a way forward with this now. We are not out of the woods yet of course so we will have to wait and see what the negotiations bring.
If Brexit wasn’t enough along came COVID-19 otherwise known as the dreaded coronavirus to test us. As you probably expected, all of the doom and gloom merchants have jumped on this as the next thing that will cause the UK property market to crash and that we should all forget about property investment and do something else instead!
The Latest on the Coronavirus
At the time of publishing this post, the UK government is taking more stringent action to contain the spread of the virus. The government is advising people to only make essential journeys and stay home as much as they can. They re-emphasised the need to wear masks and wash your hands thoroughly.
Of course it is natural to ask the question about the impact that the coronavirus will have on the property market. At the moment nobody knows the answer to this and we recommend that you remain open minded about it and do not get sucked in to all of the negativity that is surrounding it at the moment.
While it is true that the coronavirus is causing the major stock markets to fall it does not mean that it is going to affect the UK property market. Let’s take a closer look at this to see what the knock on effect could be.
Coronavirus and the UK Property Market
There have been a few recent reports that show that the coronavirus has had very little impact on the UK property market. Benham & Reeves, the London estate agent, stated that there is a growth in confidence in the London property market.
RICS have provided their last residential summary and this shows that there is good news and optimism as well. London saw the strongest price gains and there were also strong gains in East Anglia, the Humber and Yorkshire.
To add to this good news the Bank of England lowered the base rate very recently. This should help to fuel property sales through the reduced cost of borrowing. Also the government is planning a rise in stamp duty of 2% for foreign investors from April 2021 which is likely to cause a surge in demand for UK properties from overseas.
Early Days but there is reason for Optimism
In the last 3-4 years there has been a great deal of uncertainty about Brexit. Despite this and some short term fluctuations in the UK property market, house prices have remained strong and purchases have continued. This could be useful to reflect on as we brace ourselves for the effects of the coronavirus.
As always we recommend that you take a long term view with your property investments. The effects of the coronavirus are likely to be short term. The UK government predicts that the peak with the virus will occur in a few weeks and if this is the case it is unlikely to make much of an impact on the UK property market.