In the last three decades, a recession has come and gone somewhere in the world every couple of years, and for the first time in 11 years, a recession has been declared in the UK. The previous recession saw property prices crash. So what is different about this one? According to Moneyfacts, the 2008 recession was ‘financially-driven’, while today’s recession is driven by a public health crisis. Due to this shift, as an investor, there are ways that you can actually benefit from this declared recession and bolster your investments.
As the UK began to emerge from lockdown, the property market reacted positively, with reports confirming a ‘mini boom’ in activity recently. Measures were also introduced to help prop up and restart the housing market, which have massively paid off.
While it’s uncertain if this quick recovery from lockdown will continue for the remainder of the year, there are numerous reasons why investors should continue to buy into the UK market.
1. Top European city for property investment
– According to the Global Cities 30 Index, London is one of the best cities in the world to invest in property, second only to Los Angeles in the US. The wider UK market has also benefited from this, with areas across the London commuter belt seeing surges in investment.
– Prices are staying relatively affordable compared to other global property markets.
3. Value exchange rates
– The current weakness of the pound continues to be an opportunity to save money in the long-term for international investors looking to invest in the UK property market.
4. Low interest rates mean more opportunity
– The Bank of England base rate remains at a historic low of 0.1% after successive cuts were made in March 2020. This gave many investors more opportunity however, as many lenders are offering a host of new products aimed at investors, as well as incredibly competitive buy-to-let mortgage rates, making the investment process much more accessible for everyone.
5. Increase in Rental returns
– Rental sector set to rise by 12% on average by 2023
6. UK undersupply drums up demand
– There is a huge supply and demand imbalance in the UK and this is helping to support and boost the rate of growth both in cities and commuter belt towns.
7. Rapidly increasing population
– In the UK there is already a vast housing demand for it’s 66 million population. This number is forecast to reach 74 million people in the next 20 years.
8. Stamp duty holiday until March 2021
– The government announced a stamp duty holiday on all property purchases up to the value of £500,000 between July 8 2020 and March 31 2021.
9. Positive growth UK house prices
– UK house prices are forecast to grow 15% on average by 2024.
10. Ranked a Number one ‘Transparent Market’
– JLL’s 2020 Global Real Estate Transparency Index named the UK as the ‘most transparent’ market in the world. JLL states the top transparent markets ‘push the boundaries of transparency through technology, sustainability, regulation and tracking of alternative sectors’.
11. Fast transactions and turnovers
– The time taken to sell a home in the UK has fallen by 31% since the lockdown began.
These, amongst many other reasons, are certainly incentives for anyone thinking about investing in the UK property market. Savvy investors can use this opportunity to turn things around and actually take advantage of the measures put in place to help the market bounce back, to help fuel their own investment. There may have never been a better time to consider investing.
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