Effects of Corona Virus on the Property Market?

[Tassle]

The latest announcements suggest that the Corona virus is likely to become widespread in the UK, and in a worst case scenario could affect 80% of the population, potentially putting a 5th of the UK workforce out of action at its peak. I wondered what people's thoughts were regarding the short-term / long-term effects on the property market?

There seems to be no clear consensus forming in the property media at the moment (perhaps because the the potential scale has only just become apparent, and there are so many variables and permutations that it is difficult for pundits to do more than educated-guesses)

What are peoples appraisals of the situation at the moment? Some seem to be rejoicing that their investments in property far more stable and resilient that the stock market, some are looking further forward to the prospect of an economic downturn and house prices stalling again, and some are considering the more extreme (and by no means likely) possibilities of a recession or a 1% drop in the UK population.

I'm fully aware that nothing is certain and we're working with few solid facts, but I have the kind of mindset that likes to calmly scope ahead and be aware of the possible routes that this could take, and the potential effects on my business.

Any thoughts at this stage?

 

[Nicholas Wallwork]

For me as you say bricks and mortar are far more stable than stocks and shares. If you’re an investor and thinking long term (which you really should be!) then rents are what you’re worried about.

The population is growing and the number of renters increasing so I seriously doubt any impact will reverse the affects of this and start hitting rental demand. That would literally be Armageddon!

I’d focus on your business rather than the scaremongering going on in the (bad) news.... news is never positive so stay away from mainstream media if you want to keep a positive mindset...




Sent from my iPhone using Property Forum

 

[nmb]

I saw your article about landlords being expected to cover the cost of infected tenants who cant pay their rent. Bizarre in the extreme - why are private landlords always expected to pay the price?

Antipoverty campaigner suggests landlords should cover cost of coronavirus

A well-known antipoverty campaigner has written a very controversial post on his blog regarding coronavirus and private rental accommodation. The gentleman has a history of controversial policies with regards to antipoverty but this one takesRead more...

www.propertyforum.com

 

[realdeals]

Isnt it strange how all left wing/socialist "campaigners" can never see past milking the property market of more and more money. Lets see the facts:-

Over 500,000 former private let properties have been taken out of the market because of the ever increasing tax burden on buy to let investors

If taxes go up, landlords get hit with more costs, then more will leave the market

This will reduce supply at a time when demand for private accommodation is rising

Which will inevitably lead to an increase in rents

So much for helping tenants!

 

[PostBrexitInvestor]

Just seen that 16m people are now in quarantine in Italy which will have a huge impact on holidays lets, etc. This issue is starting to get very very real for many people and the financial implications could be significant in the short term. Will the UK's island status help quell the virus?

 

[momentarily]

Hi

The coronavirus will have an unintended constructive impact on what was already a robust property & rental market if interest rates remain low and the return to normalcy is only a few months. Aggressive and coordinated fiscal and economic stimulus in the US and beyond will continue. Most important is the improvement in health outcomes, however, regardless of the recuperation timeline, there will likely be a period when the stimulus is still creating an impact that could be advantageous to Property and Rentalplace investments.

Thanks
momentarily

 

[PostBrexitInvestor]

Hi @momentarily

I am interested to widen the discussion on the benefits to the property market. Will some of the benefits of lower interest rates not be offset by the short term inability of many tenants/investors/homeowners inability to cover their financial liabilities?

 

[Joshua Baines]

Hi all,
I personally think that property prices will drop drastically as people fall on hard times and look to sell and move into rental. I then believe this will cause an increase on rental income due to popular demand. Personally after things go back to normal and we can all go back out I think there's going to be some very cheap houses with very high rental income.

Hope this helps,

 

[Longterminvestor]

I am unsure about a move towards the rental market as just recently 500k properties were taken out of the private rental market by private landlords. I also think many people will have built up sufficient equity in their properties to get through the difficult times maybe by remortgaging.

 

[Longterminvestor]

Looks like a long term freeze would be very costly for the UK government:-

Property market freeze could cost the Treasury £5bn in lost Stamp Duty - Property Industry Eye

Property market freeze could cost the Treasury £5bn in lost Stamp Duty - Breaking news for estate agents and the residential property industry. Independent, unbiased, and factual reporting. A forum for discussion and debate of topics of the day. Subscribe for our free daily newsletter.

propertyindustryeye.com

 

[realdeals]

I read a comment this morning suggesting that if the lockdown was to end my June then the impact on UK property prices should only be in the region of a 3% fall. While this is probably around a 5% fall when you consider prices were expected to rise in 2020, this is nowhere near as bad as the 20% being suggested by some people.

 

[Ryan Lin4511]

The fall in rental properties are reaching near 20% and if this lockdown continues there are chances for increase in the percentage.

 

[NewOrleansHomeBuyer]

The forced business closures are sucking so much money out of the economy. The spike in unemployment is going to have a huge impact on the economy. With this reduced income and loss of revenue there is no way people will be able to pay the same price for properties. The corona virus has to have an effect on property prices. The bigger question is how big an effect?

 

[Longterminvestor]

I saw that report about London prices expected to fall by just 3% (well its actually more when you factor in the previously expected rise this year) but I am not convinced. We are in uncharted territory!

 

[PostBrexitInvestor]

The longer this goes on the bigger the impact on finances, cashflow and sentiment. The sooner we can safely get back to normal the better for everyone.