Now? Amid all this uncertainty? Yes! Why?
We have explained that below.
The pandemic has left its mark globally and one of the most important factors being the economy. With personal finances also being affected, some people are looking for more than one source of income.
For those who can afford it, the property market could be just that source.
As estate agents all over can testify, including the estate agents in Notting Hill, the famous district of West London, the pandemic unexpectedly caused a boom in the real estate market.
We list below five reasons why now is a good time for investment in UK real estate.
Resilience & Return
The UK property market has managed to remain relatively stable, despite the inevitable ups and downs.
It is one of the safest methods for investment.
It is a tangible asset that can be depended upon to secure beneficial returns, not only as a source of rental income but also from capital gains.
Also, despite the pandemic “hit”, London has remained among the top cities for property investment and development.
This includes its districts as well and the lettings agents in Nottingham can vouch for it.
Demand Over Supply
The demand for properties still exceeds the supply, which is a good sign for those looking at property investment.
Due to the economic crisis, some distressed real estate has emerged, offering good discounts below market value for such properties.
Investors can use the money saved from discounted property purchases towards another investment, thereby increasing their potential.
The extension of the stamp duty land tax holiday till the end of June 2021, phasing out till the end of September, gives people the opportunity to take advantage of the huge benefits involved by investing in property at this time.
With the lockdowns causing more people to work online from home, the demand for larger, more spacious accommodation has risen for residential-official-relaxation purposes.
Such properties including properties in Nottingham have such amenities that attracts people who are house hunting.
However, some unused office spaces in cities will likely be converted to residences.
With the vaccination programmes running and the possible return to normality with some city offices, restaurants and entertainment centres reopening, such converted office-to-residence city properties will likely be in high demand.
Low Interest Rates
The Bank of England interest rate is at a low of 0.1%.
This has resulted in many openings.
Mortgage rates are very competitive, and some lenders offer excellent rates for Buy to Let properties.
There are also many general mortgage offers available, some with “bonuses” or incentives.
Depending on the individual need, there is a wide range to choose from.
The low-interest rate is a boon for first-time buyers to obtain an affordable mortgage with the ability to pay it back.
It is also beneficial for property investors who have more than one property.
They can remortgage, release equity and look at new investments.
The rental market has seen a surge, with the prediction that it is only going to rise, even when things hopefully get back to normal.
With more people working from home, comfort is a priority and properties in areas with a good internet connection and office space are in high demand.
Nearby transport links would be an asset.
Now that lockdowns are being lifted, schools and universities will reopen.
This will result in a boom in student and young professional rentals as well.
Suppose a decision is made to buy property to rent.
In that case, it should be appealing to the target group – whether students, the younger working-class, older professionals with families etc.
Investors can benefit from Buy to Let properties by receiving an income that can leave a saving after paying taxes and mortgage with a good investment.
Looking at long-term advantages, a property will likely increase in value after some years.
This will increase the investor’s capital gains.
Another benefit of buying property to rent is that the cost and fees can be offset against taxes.
Tax relief is also offered for renovations, maintenance and repairs.
The letting agents in Notting Hill will be able to clarify the advantages of investing in the rental market.
Real estate investment is a comparatively low-risk venture.
Valuation of property usually increases with a good return on the investment.
Rents also tend to rise, which can result in more cash flow.
With mortgages paid, equity increases which allows leverage to buy additional properties.
Investing in real estate has a diversification potential.
It can be added to a diversified asset portfolio, thereby lowering volatility and risk.
One needs to study all the pros and cons before making any decision.
Investment in the property market is no different.
However, with the UK being among the top in the Global Real Estate Transparency Index, it is definitely a pro for would-be investors.
Also, more international investors are becoming interested in the UK real estate market, not only because of affordable prices but because of the stability and prediction of a rise in house prices in the future.
So, now is definitely a good time to invest in UK real estate!