These are difficult times in the property market, with a constantly changing situation creating a great deal of uncertainty. The world is facing a crisis and now the UK is in a temporary lockdown, but the outlook for the property market is not as bleak as some might imagine and the challenges of Covid-19 may present some good opportunities for resourceful investors.
As a property developer who has seen the market rise and fall several times, I wanted to share my advice with those concerned, looking at what property investors should do now, and looking with greater perspective into the future, to thrive during this time of adversity.
We have gone from the letter B (Brexit) to the letter C (Coronavirus) with this new situation, which is unfortunately extending the period of uncertainty that surrounded Brexit. All the situations that Brexit brought about, such as the drop in stock market drop and financial uncertainty, are now enhanced and remain a lingering presence, stifling market activity. But for savvy investors, it’s a great time to be more active than ever to spot deals, and using a long-term perspective is the key to success in scenarios such as these.
If you’re looking to invest, look for opportunities with a vision in mind of where the market will be in six months to one year, rather than right now. Take advantage of technology to speed along the viewing process and maintain social distancing.
Prior to the outcome of Brexit and the general election, sellers were fearing the worst and in many instances taking substantial reductions in order to sell.
We noticed a complete change in stance once these events concluded with sellers gaining the confidence to hold out for their asking prices. With the turmoil and uncertainty of Covid-19, many sellers are now either withdrawing their property from the market or are open to taking substantial offers in the hope of attracting a speedy sale.
Property Experts has in the last week alone received an unprecedented number of calls from sellers and agents alike where despite having previously rejected our offers to purchase now wish to proceed.
Many homeowners are looking to sell fearful of a potential market crash, and a substantial number of landlords have concerns that their tenants will fail to make rent payments. Individuals, falling into these categories would prefer the security of money in the bank rather than potentially risking cash flow issues from non-payment of rent or even worse a drop in the asset’s value. Additionally, we are learning of a growing number of employees being made redundant and for those with limited savings to fall back on, this may result in panic selling.
With the current global climate creating uncertainty that is likely to delay new developments launching to the market, now is an ideal time to invest. It will also probably lead to a busy summer period if the crisis has calmed by then, with the typical summer and winter lulls unlikely to happen this year. I believe that once the economic panic around the virus has abated, we are likely to see a more buoyant market and a great deal of activity and positivity. But for those who can, now is the time to achieve big discounts with offers below market value, which are more likely than ever to be accepted.
Bruce Burkitt is the founder of Property Experts, a small London-based development and acquisition company.