Corona virus has undoubtedly taken a toll on the economy of the world; the London property market also is not spared from the corona virus effect. The London property market is expected to slow down as lockdown is imposed in capital to contain the virus and property agents are reporting a drop in home viewings and new listings drying up.
Novel CoVid-19, has shocked the human race and changed normality for millions. Since the corona virus disease was detected in China, people’s lives have been turned upside down. It has already spread across almost in more than 100 countries, infecting more than four million people and killing more than 2,75,000 patients. With the outbreak of the disease, the world economy has taken a great hits, the stock market has seen declines. It has affected almost every sector of the industry.
With no sign of vaccine in the near future, all the countries are trying hard to contain the virus with lockdown and social distancing method. Despite all the efforts, the number of infected people is increasing; no promising results are evident from the efforts of scientists to stop CoVID-19. Things are very uncertain in this situation and property market is volatile at best. The effect of lockdown has even worsened the economy as everything has come to halt except for some essential services.
Coronavirus Dampened the Property Market
Before the corona virus outbreak, the London property market was on its recovery path and it was seen that an increase in London’s property prices which was the effect of certainty in Brexit and political stability followed by Boris Johnson’s election victory. Until the corona virus response become drastic, the London property market was at its strongest it had been since before the Brexit referendum, with asking prices showing the biggest annual increase since May 2016.
We are yet to understand the full outcome of corona virus on the property industry. Property industry figures are not very promising and are quite evident that this unwanted event has put the brakes on the forward momentum of the foreseeable future. The UK government has issued strong guidance advising buyers and sellers to delay their purchases unless the property is vacant or they are contractually bound to continue a sale and both parties can’t reach an agreement to postpone.
The property consultancy Knight Frank said the 38% drop in the number of house sales in 2024 would have a ripple effect across the property industry, hitting retailers, removal companies, and even government coffers. The property market has already seen a 40% fall in the number of homes listed for sales. There were several reports of big-ticket international transactions falling through over the weekend, with overseas clients backing out of sales.
The latest right move research published this week showed the average price of property coming to the market this month dipped 0.2 percent to £311,950.Estate agent, Savills, estimated that average UK house prices will fall between five percent and ten percent in the short-term while the low transaction market caused by the corona virus lockdown continues.
Should You consider buying a property in London?
The latest research by the peer to peer lending platform, Sourced Capital, has looked at which investments are considered good options during a crisis and which have seen the greatest return over the last decade for those looking to invest over the coming months. The company looked at three investment options – Precious metals, Dividends Aristocrats, and Property.
While buyers are confused whether to go ahead with their investment options are not, some experts believe that now is the time to invest in property. Investment is always considered as tricky business and it may also pay well. Some investors have considered pulling out their money from the stock market and rely on investing in property as safer option instead.
London property is still being considered as ‘safe haven’. International investors are still looking for property for sale in London with agencies like One Investments as an option with some reporting blind bids and sales achieved after video property tours alone.
Tim Macpherson, head of London residential sales at Carter Jonas said: “While activity has slowed significantly, our pipeline of sales is holding well. And while stocks and shares investments have taken a blow, the property is often a safe haven.
With lockdown into effect, social distancing and work from home have become new normal. Potential buyers are not pushed back with corona virus effects are still showing interest in buying properties. Many foreign investors are sending their UK representatives to view property in their place. Property agents are also arranging face time meetings and viewings to maintain communication.
Home buying through video viewing could be a possible future for the property market.
“This is a really interesting challenge for the property market to adapt to and may pave the way for how the future of the industry will look in years to come,” said, Jamie Read, director of London estate agent Tavistock Bow.
Future Prospect
Though the present scenario is not very promising, most analysts believe that the housing market could make a strong recovery by 2024.Knight Frank forecast that London house prices will jump six percent in 2024, while Chestertons said it expected to see the growth of three to four percent in central London next year.
Savills are more optimistic about the years ahead. The estate agent’s analysts say mid-term price growth will be an average of 15 percent over the next five years, with central London leading the recovery.
Nationwide has predicted that the economic measures put in place by the government during the corona virus pandemic could help UK house prices rebound sharply after the crisis has passed.
If experts are to be believed sharp recovery in the property market after corona virus lockdown is expected. Hence this is the right time for investors to invest in the property market for better yield.
I would like to recommend visiting One Investments, with experts in the real estate market, can help you make your investment decisions wiser. One Investments offers you suggestions considering your needs, budget, and yield, you are looking at within a specific time. It can help your money grow.
