Despite the very sudden and unique changes to lives and businesses, the property investment landscape is still as interesting and captivating as ever and more importantly, far safer than you might currently be thinking.
Here’s why you should continue to invest in property, despite the impact of Covid-19 –
The impact of Covid-19 cannot and should not be diminished. It is a heavy blow, out of the blue for countries, industry, businesses and individuals. We are trying to balance health with financial stability, economic strength with support for individuals and current concern with future progression.
So what does this mean for property investment? How safe are our existing investments and how risky is future investment?
First of all, the obvious. Long-term, property is still more stable than the volatility of stocks and shares. Property is less susceptible to turbulent economic changes.
Regardless of economic change, property is a physical asset that unlike stocks and shares, affords choice, flexibility and diversity.
It can be changed and adapted in line with the economic, behavioural and local climate. The redevelopment of a building or change of use can quickly turn an investment around and maximise returns. For example, we are now seeing the fashionable retail centres closed and likely to remain less of an attraction than the much required warehousing. Spending may move away from physical stores, but this has prompted a boost to ecommerce and the demand for industrial space. Shopping habits have changed, not disappeared. Instead of products, companies are offering services, instead of shops; the ability to order from large warehouses has emerged. All viable opportunity for the savvy property investor.
Our trusted partners and property developers are already looking at the potential offered by embracing the changes in distancing, the demand for more physical space and less density in workplaces. Open-plan layouts and flow are already features in their developments. With the ability to gain valuable and rich behavioural data, developers are able to construct tailored strategies to suit their frameworks. Fact based decisions, revolving around immerging local insight and economic situations, allow outcomes to be targeted to suit individual developments. These are the developers of the future, the leaders and the security that property investors and tenants alike will be clawing for. Rising to the challenges presented by Covid-19 and implementing solutions to meet standards and regulations will in turn, retain high tenant attraction. Operations will continue and grow, and lease negotiations and asset valuation will be positive.
Due to the pandemic, the demand for UK home produced assets and supplies has been evident and will continue to grow. With supply chains outside of the UK diminished, more business will be done within our borders, demanding property space and facilities to achieve it.
Continued opportunity within the property market
Changes in behaviour and social distancing relate directly to the way that property and space is used, inhabited and interacted with.
This means clever and innovative ways of creating the ‘ideal’ space will be called for. With less travel abroad for business, meeting rooms, conferencing facilities and technically advanced property solutions that adhere to new regulations will be a priority.
As lockdown rules are lessened, people will look at booking their holidays. Unable to due to restrictions, or afraid to travel abroad, the demand for UK holiday property will surge.
It is true that a significant amount of property may be rendered obsolete but in contrast, the shrewd developers will grab this opportunity with both hands and strive to ensure a competitive diversification that will continue to generate robust and continuing return for investors
Whilst the current pandemic seems to have gone on for a long time, it is a short-term crisis and it will end. As we have seen historically, volatility in the market will stabilise.
Adapting your property investment strategy now will lead to success that goes far beyond the current economic situation. We are not reinventing the property wheel, just elevating its design.
Crowdfunding – Lower Risk Property Investment
You may feel that you want even more security and there are options for investing in property at even lower risk.
Investing collectively, centralising assets, crowdfunding opportunities, new schemes such as rent to buy, financing partnerships and diversifying investments are all exciting low risk opportunities.
Property crowdfunding at fixed returns is a popular, low risk investment. Even more uniquely, investing in crowdfunding with the SSAS Loan Association offers a portfolio of property of loans paying up to 9% pa, with the added security of diversifying the risk across the four main UK property sectors.
By centralising funds and the management of investments, it is possible for crowdfunding to focus on efficiency and make informed portfolio and capital expenditure decisions. It is also extremely simple and time efficient, meaning a safe but hands-off experience for investors.
As banks start to reduce their financing of new developments, as is predicted, new opportunity for alternative means of funding property development will be sought across the board. Interest rates at an all-time low and likely to drop further ensure that the return on property is far greater than any return on traditional savings accounts. Property, both as an asset and as a debt is an extremely attractive option.
So, yes, there may be obstacles to overcome, but in turn, they highlight some very exciting opportunities. As people find new ways to cope with distancing, it will soon be business as usual. As with any economic crisis, society rises to meet the challenge. Productivity will increase, demand for property to facilitate this will increase and the circle will continue, with property as always, central to economic growth. There are many creative, niche and innovative ways to meet the changes in the demand for property head-on. Embrace this change!