With wage cuts, job loss and uncertainty in almost every sector, Covid-19 has changed the world as we know it. Potential buyers and real estate investors have become very cautious and taken a step back, which has had a visible impact on the real estate industry as a whole. Be it Estate Agents in Cheltenham or real estate agents in Leeds, and almost every agent can agree that the real estate sector has taken a big hit. Potential buyers are putting deals on hold, most investors have slowed down their investment practices, and many houses are sitting on the market for more extended periods than expected. And that brings us to the question at hand; how is coronavirus affecting house prices in the UK?
There has been a slight increase in prices
According to Robert Gardner, Nationwide’s chief economist, there has been an unexpected yet rapid recovery in the housing market after the lockdown restrictions were eased. It seems that more and more people are getting comfortable with the idea of working from home, there seems to be an increase in the number of potential buyers that are looking for properties in the outskirts of the city. Also, after the lockdown, many buyers are now looking at potential properties which have caused a sudden increase in demand, hence the slight price increase. However, it is too soon to say whether this is a long-term increase or just a temporary increase in price due to unexpected demand.
The number of homeowners wanting to shift to the outskirts has increased
As more people are working from home, homeowners are not starting to look at bigger houses, houses with garages that can be converted into home offices houses with more rooms so that one place can be used as a home office and so on. There has also been an increase in the demand for properties with gardens as people are feeling the need to be out in nature after being forced to stay in their homes during the lockdown. So, while landlords might have a hard time explaining the reason for high rentals in the city centre, sellers and landlords with property outside the city are very happy with this upcoming trend. It seems like working from home is the thing of the future, in which case this is a trend that might be here to stay.
There is a significant increase in foreign interest
There has been a significant increase in interest from foreign investors who are looking to invest in property in the UK. While the demand for property might be on the rise, the supply is relatively consistent in which case the prices will soon start to increase. In fact, in popular areas like Manchester, Leeds and even Birmingham, it is expected that the increase in investor demand will cause the prices to skyrocket in the coming years. Of course, the government is happy to have foreign investments as that will boost the economy, which is another reason that foreign interest could cause a slight spike in housing prices.
Choosing the future over future holidays
Simply put, since most people have not been able to leave the country for international vacations, a lot of money has been saved. Since the future of commercial flights and international travel seems a little uncertain at this point, people are now thinking of investing in holiday homes that are not too far away. That gives them the liberty to reach their holiday homes via road or domestic flights. Hence, it is predicted that soon, we will see a steady increase in the price of holiday homes in and around the UK. If you are considering investing in a buy to let property, then investing in holiday homes will be a fruitful investment. Also, with so much money saved, homeowners are looking at improving their standard of living, which usually includes moving into bigger homes and buying instead of renting. Both of these factors will play a significant role in the price of real estate and housing in the future.
While the current trend might show that there is a slight increase in the price of housing in the UK, it is safe to say that this might just be a trend. It is expected that there will be a second wave of coronavirus, which will lead to more wage cuts, an increase in unemployment and also potential lockdowns. So, while the prices may be on the rise right now, the future of the housing sector is pretty uncertain. So, if you’re thinking about investing in property as a long-term investment, then now is as good a time as any other to invest. However, if you’re thinking about short-term investment or flipping property, then you need to do your due research and speak to the experts before making any investment decision.