The property market hasn’t been immune to the effects of Covid-19. In June, Nationwide reported that house prices were 0.1% lower than the previous year – the first annual fall in eight years. The building society also revealed that house prices dropped by 1.7% and 1.4% for May and June respectively. The figures represent the biggest monthly declines since the financial crisis. Although, comparing the current climate to that of 2008 might not be a fair comparison. The financial crisis was directly related to the banks. Because of this, mortgages were harder to come by, and interest rates were less favourable. The opposite could be said about the current state of the property market. In response to the pandemic, the Bank of England has reduced its base rate to 0.1% . Unlike the events that followed in 2008, banks are lending at favourable rates, which is great news for investors. So, if we are being encouraged to buy with government incentives and good loan rates, what has caused the recent dip in property value? The impact on the housing market seems to be linked to a lack of activity, and figures could back up this theory. Lockdown measures have begun to ease across the UK. People are now able to view properties and visit banks, which has led to a spike in interest. According to Rightmove, the increased activity in the market has led to an increase in house prices. The property portal found that average asking prices have increased by 2.4% since before the lockdown. The annual pace of growth is also up by 3.7% – the highest it has been since December 2016.
With house prices rising, mortgage rates falling and demand for rental properties increasing. is it time for you to consider property as an investment?
For more information, please contact me. I will be happy to help with whatever questions you may have.
Rob.
E: robert.gourlay@holbornassets.com T: (+6) 01151565649 W: www.rgwealthsolutions.com
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