Coronavirus – What it means for the housing market.
The new Coronavirus which causes the illness Covid-19 is bringing the biggest change to the way we live in my memory. Most would agree it is the biggest change since World War 2.
Schools are closing. Businesses are ceasing to trade, some for the short-term and some for good. Politicians use phrases like “we are at war” and are encouraging us to change the way we live. Stock markets are crashing. Public spending looks set to outstrip all spending before.
Today we are looking at what could happen to the housing market because of the Coronavirus and what you can do to make the most of it.
I certainly don’t think I can predict the future. However, the coming weeks, months and years will be filled with uncertainty. This deadly Coronavirus will have an impact on our way of life long after we have a readily available vaccine.
The ability of China to seemingly stem the flow of the virus provides hope that things might move back to (some sort of) normality soon. But it is impossible to predict the world we will be living in when we come out the other side of this global pandemic.
That said, we look to be heading for a deep recession. Most experts predicted that we would be heading that way after Brexit anyway. When you factor in the “Corona Crash” it could be the worst recession many have known.
Consequences of a recession
The housing market will be impacted. House prices tend to fall in a recession. Demand drops as people lose jobs and worry about uncertainty. The Bank of England has slashed interest rates to try and encourage borrowing, but with so much uncertainty this may prove ineffective.
We might see an increase in buy-to-let purchases. With cheap finance and a falling market some will look to buy assets. This has the benefit of increasing rental supply which will counteract an increase in demand from those not buying.
But. If you are looking to purchase the family home for the long-term now could be the ideal time. You too can take advantage of long fixed-rate, low interest mortgages. While the market may take a short-term dip, history tells us that if you hold a property long enough it will appreciate.
Even if you feel immersed in doom and gloom there is always light at the end of the tunnel. The property market is full of opportunities if you look for them in the right places. It has a history of bouncing back and if you hold your nerve you can make the most of it. So, if you want my advice, stay safe, employ social distancing, wash your hands, don’t go to the pub and be positive about the opportunities which lie ahead.
Email info@oxfordpropertyconsulting.co.uk if you are worried about your housing situation. We will arrange a call to discuss your own personal circumstances.
If you’re stuck in the house and thinking of listing it after the epidemic then read our advice on how to get your house viewing ready.