What COVID-19 means for property investment

Craig Jerram, Business Development Manager

I’ve been working within the property industry for over 20 years, and in that time I have seen a multitude of different market conditions. 2020 was believed to be the year when many investors would satisfy their pent-up housing demands following the EU referendum, and the market definitely started to trend that way with increased demand and transactions. Yet only a few months later we face the current COVID-19 pandemic, something very new to us all, and certainly not something the market could have predicted.

Whilst in the short term there will be challenges on trading, and understandably some will decide to place things on hold, I whole-heartedly believe savvy investors should be doing the opposite. Investment should be viewed from a long-term perspective and it is therefore not subject to the day-to-day volatility that affects the stock markets.

What will not change is the ever-increasing demand for privately rented accommodation. This has continued to grow since the early 1990s, when an increasing percentage of younger people pushed homeownership onto the back burner. The Office for National Statistics shows that people aged between 35 and 44 are now three and a half times more likely to be living in privately rented accomodation than they were in 1993. When you consider the financial implications the current situation will have for many, this will further increase the need for rental properties, as those with plans to enter the property ladder find it increasingly more difficult to save up for a deposit.

The current stop on new homes being built, along with the reduced legal completions and a change in the peak period of sales, will have an impact on the pre-existing shortfall of stock versus the rental market’s demands. This will see a period of increasing pressure on availability and therefore positively affect rents and yield, giving investors and landlords an outstanding opportunity if they take advantage of the market right now. Not forgetting that when most tenants find the perfect property (one that provides them with the important factors such as commute to work or university, transport links or the social life they require) they’re now choosing to stay longer, meaning less void periods and a more stable income and investment.

With interest rates at a record low of 0.1%, money in the bank is set to deliver an even more woeful return than it has for many years, whilst rental demand and yields continue to prosper, providing much stronger returns.

There has therefore never been a better time to invest and that starts with a call with one of our experienced team members. Assetz Property has a wealth of experience and are specialists in property investment throughout the UK, meaning any of our knowledgeable sales managers can assist with any questions or requirements you might have.

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Risk Warning and Disclaimer:

The price of property can go down as well as up. Historic performance should not be taken as a guarantee of future performance. Geared property investment with mortgages can increase risk of losing money as well as increasing the possible gains. Mortgage products referred to in the website can be withdrawn by the lender or have rates or other terms changed without notice and reference to any products does not imply they are certain to be available in the future. Mortgages referred to may also have certain applicant restrictions and are for indicative purposes only although reasonable endeavours have been used to ensure that they are available at the time of publication and are applicable to a significant number of our purchasers. This site is for information purposes only and nothing on this site should be taken as definitive investment advice for your particular situation without you seeking additional guidance directly from ourselves or from other finance and property professionals. Property particulars on this site do not form part of an offer or contract. The developer and Assetz Property Ltd, whilst endeavouring to ensure complete accuracy in these property particulars, cannot accept liability for any errors. Valuations of property or indicated rents achievable are either estimated or derived from valuations and/or comparables and can change and should not be relied upon without your own additional valuation and research, but we have carried out reasonable endeavours to achieve accurate indications for these figures. All descriptions, dimensions, areas, reference to condition and, if necessary, permissions for use and occupation and their details, are given in good faith as provided by the developer and are believed to be correct. However, these are subject to change, especially, but not wholly, relating to any property that is off-plan or not yet complete. Any intending purchaser should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to their accuracy. The onus is on each individual investor to undertake their own due diligence, enquiries and inspections. Where shown, net yields are calculated as rental income less expected service charges less expected ground rent as a percentage of the property price. No void periods, optional letting agent costs, repairs or other costs are deducted. Our standard Terms and Conditions of Sale will apply. E. & O. E.