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UK property market remains open and active
There have already been signs of revival in the UK property market. As lockdown measures have begun to ease, more people are beginning to consider buying and renting real estate once again. Indeed, data for the week ending 16th May showed that the number of prospective buyers registering with Knight Frank reached the highest level since the second week of March.
It’s also important to consider that a by-product of the impact of Covid-19 will be that low interest rates look set to remain in place for longer. In May, financial researcher Smart Money People found that 77% of UK mortgage brokers believe mortgage lending will recover to pre-Covid-19 levels within nine months, particularly as lower borrowing costs could tempt more people into the market.
There have also been signs of positivity in the UK’s rental market in recent weeks, too. According to Goodlord’s Lettings Activity Tracker, between 12th April and 7th May new rental applications rose by 45%, while new completed tenancies also increased by 22%.
This is a sharp spike following the marked reduction in rental activity just one month previous when lockdown measures were first introduced.
Of course, Covid-19 will naturally have some short-term impact on growth. But, crucially, estimates from Savills suggest that any short-term reduction in UK property prices will be significantly smaller than those reductions recorded following both the 1990s recession and the Global Financial Crisis of 2008. It’s worth noting that the temporary sudden drop in activity caused by restrictions imposed in response to the pandemic represent a reduction in supply rather than demand. As restrictions are eased supply can be restored relatively quickly to meet the demand which still exists in the market.
Remember, compared to other forms of investment, property is undoubtedly one of the strongest long-term investments you can make. UK real estate has a proven track record of resilience and endurance throughout periods of wider economic volatility
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Thank you for your understanding, and please stay safe.
Managing Director, Select Property Group
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