Amid all the havoc created by the pandemic, including the economic crisis, one would hardly consider it the best time to invest in real estate. However, surprisingly, there are some excellent reasons as to why property investments are a safe choice at this time. As estate agents generally agree, including the letting agents in Hyde Park, in central London, property investment is a wise decision to make.
We give below a few reasons for this assumption.
Stability: “Bricks and mortar” – the property market – has always been resilient, and even though there may have been slumps at times, it has been able to withstand the tests, bounced back with vigour and remained relatively strong.
Safety: It is a physical asset, unlike the volatile stock market. Even though the value may depreciate, the property itself will not disappear, and the asset of having physical property will always be there. Therefore, it is a safe measure for investment.
Low risk: With the pandemic affecting economies globally, it is best to look at low-risk investments. In the property market, new equity projects (where you own the property you invest in) could be considered. Even if prices go down, there will be good returns on the investment. Debt investment (where money is lent to the property owner) would be safer though the returns may be lower. Property crowdfunding (joining a pool of investors with a small contribution to help fund big projects) is another low-risk investment. Estate agents in Hyde Park or any locality you are looking at will be able to offer sound advice.
Opportunism: Time to take advantage of situations.
Banks are likely to reduce financing of new projects, resulting in opportunities for alternative financiers to step in.
At the same time, the Bank interest rates have been lowered, affecting mortgage rates and the type of mortgage taken.
The economic situation has resulted in some distressed real estate offering good sale discounts.
SDLT holiday extension: The Stamp duty land tax holiday has been extended until the end of June 2021, with a phasing out process until September. It would be advantageous to make the most of this if looking at property investment.
Digitalization: With the lockdowns caused by the pandemic, almost every industry, including real estate, has become dependent on technology, which is likely to keep expanding. Not only are virtual house inspections being successfully carried out, but Proptech is becoming increasingly popular, with its variety of facilities, including Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML) and more. As a result, a wider sphere of amenities is available for all concerned with the real estate market – buyers, sellers, agents, landlords and lenders.
Office to Residential: As a result of the pandemic, many offices had to be closed with people working online from home. Although there may be a return to office working in the not too distant future, it will probably not go back to pre-pandemic days. People will continue to work, at least part-time, from home. It has been revealed that the City of London – the famous Square Mile – is planning to transform empty offices into residences as a means of revival. This could be an opportunity for would-be investors – not only in the Square Mile but also in surrounding areas, including properties in Hyde Park.
Conclusion: Despite the Covid vaccination programme and the hopeful return to near normalcy, the future is still uncertain. Job insecurity is a major issue, and people are looking to have more than one income source. Property investment is one of the most secure means. Even though digitalization has dramatically changed the industry, it is still the human hands that “press the buttons”. Hence, having an experienced real estate agent can be of immense help in making the right decision to invest in property at this rather difficult time.