The global economy has undoubtedly suffered as a result of COVID-19. We have witnessed a a recession, and compared to the global average, the UK stock market exhibited prices as cheap as they were nearly 50 years ago. Following a gradual climb, a second lockdown has knocked companies such as British Airways down 12%. However, the Scottish property market is thriving.
But how has the property market fared?
It has remained remarkably consistent throughout lockdown. In September house prices in Britain rose at the fastest rate since the Brexit vote in 2016, despite the pandemic, and Nationwide reported the average UK house price rose by 5% (YOY), a record high.
While appetite to invest certainly hasn’t wavered, the ability to secure your purchase has been met with new restrictions. Only 6-8 months ago it was possible to buy a property with a 5% deposit. This has now increased to 15%.
It’s worth considering that without this 10% increase, and with further mortgage resource, we likely would be witnessing an even more substantial investment rate in the UK.
Here is what we experienced.
At Tay, in the initial six weeks of lockdown, we secured new tenants in 71 properties. In the first half of May, despite the inability to view properties, we conducted 126 FaceTime viewings. The demand of rental properties has remained consistent this year. The shift to working from home has driven demand as people now need their property to act as both a home, and an office. Because of this, the outlook on the Scottish property market has remained strong for our Tay Invest clients.
If you’re taking a long-term view, which we would always advise, it doesn’t matter when you invest. If investments are put on hold until March 2021, there may be a slight dip in property value, however for an investment that spans over 10-20 years, this short-term dip is marginal.
There’s always opportunity for speculation, but all the fundamentals such as shortage, supply and accessibility to funds are there. Scotland is further behind the curve than other major UK cities, which makes it a dependable place to invest. As a result, we’re seeing continued high demand from investors from across the globe looking to expand their portfolio.
The property market is not as volatile or influenced by circumstance. That’s why taking bets based on short-term movements isn’t a strategy for long-term success. Through our Tay Invest service, we guide clients through every step of the journey so they’re maximising their investment in the long term.
If you’re looking to discuss your next investment, get in touch. We’d be delighted to assist.