Amid political and economic uncertainty, like the uncertainty prevalent since the Brexit referendum, it can seem like it’s not an ideal time to invest in the UK property market. Many investors and homebuyers have chosen to wait and see what happens with Brexit and the general election before buying property.
Despite this, there are many advantages for investing in the property market during uncertain times. Uncertainty can breed market conditions that work well for investing in property, so here are a few ways you can make the most of uncertain times.
Take advantage of lower property prices
Many may assume political and economic uncertainty is a time to hold back on financial investments, especially as many reports show property prices have fallen since the Brexit vote. However, uncertain times open up a great opportunity for people to invest in property at lower prices.
Property prices have dropped in many areas across the UK since the EU referendum, especially in London. As it’s currently a buyer’s market, you’re more likely to get a competitive price on properties as other people look to sell. In the past month, the average price of a property being put on the market fell by 1.3%, which equates to £3,904.
It’s important to note that housing prices often fluctuate, and there will always be peaks and troughs in the market. When investing during uncertain times, make lower offers on properties you’re looking to purchase, and investing in properties that leave you room to add value can be especially beneficial.
Focus on rental yields and areas with strong tenant demand
Buying and selling for profit is likely to be less lucrative during uncertain times. When investing in buy-to-let, there’s more to it than just capital appreciation. Rental yields are a huge part of this type of investment but especially when uncertainty is prevalent.
It can be a more beneficial plan to prioritise investing in areas with high demand from tenants, especially in locations where demand still isn’t fully being met. This can lead to higher yields and less void periods.
Investing in regional cities, especially university towns, across the North of England and the Midlands could prove lucrative as property prices are rising and demand is strong in these regions, bringing healthier yields.
Make a long-term investment
Often when investing in the property market during turbulent times, it needs to be viewed as a long-term investment. Short-term fluctuation in property prices is unlikely to impact investors as much if they invest for the longer term, such as five years or more.
If you’re looking for a property to only be a short-term investment, you don’t leave yourself much room to earn a profit during uncertain times. There are also longer term trends that support the future performance of the UK property investment market.
As the population continues to grow, more houses are being built. However, this still isn’t keeping up with demand. Letting compliance firm, VeriSmart, even revealed if renting continues at the current rates across the UK, tenants will outnumber homeowners by 2039, showing the growing demand in the rental market.
Do your research
With any property investment, it’s important to do your research, but it’s especially vital during uncertain times. It’s helpful to have a good understanding of the local demand and market where you’re interested in investing in and to accurately research the numbers behind property deals.
At PropertyMenu we present and calculate deals consistently based on a tried and tested deal calculator to help you have full clarity of each potential property investment opportunity, so that you can make informed decisions. As an online platform bringing together a community of property investors and sourcers, PropertyMenu is allowing more people to invest more effectively and find profitable property investments even during uncertain times.
What are your thoughts on investing during uncertain times? If you want to learn more about what we’re doing at PropertyMenu, click here.