Home Property Why the alternative investment property market is likely to bounce back

Why the alternative investment property market is likely to bounce back

24th Jul 20 8:15 am

According to the latest reports, the UK economy declined 20.4% in April alone. With rumours circulating that the UK has all the ‘ingredients’ to experience a property crash, many could argue that the immediate future for property investment looks bleak.

However, with alternative investment comes an increased appetite for maximising opportunity and risk, meaning those who stay in the game long enough are likely to benefit from what could soon become a ‘buyers’ market’.

The market is open… But is it moving?

Following a temporary freeze in both residential house moves and property construction, the ease to lockdown measures means the property market is now moving again, particularly as Sunak’s new stamp duty policy will save home owners thousands in moving costs over the next 8 months.

While this latest announcement has proved beneficial for those on the brink of selling up, a serious decline in property prices seems less likely, meaning stock will be limited for Landlords, forcing them to compete heavily for any quality property deals.

With every crisis is opportunity

Prior to 31st January 2020, property investors have been divided over the impact of Brexit, with some sitting on their hands and waiting to assess potential economic decline and others perceiving it as an opportunity to increase investment and resulting market share.

This same divide will be prevalent both during and post the coronavirus pandemic, where those who take a risk and perceive any downturn as an opportunity, will come out on top as the market recovers.

This sentiment is echoed across the pond in the US, where Real Estate tycoon, Grant Cardone recently revealed 25% of homes currently for sale in the states are listed at a lower rate as a result of the pandemic, meaning savvy-home buyers looking to gain an eventual return or investors looking to expand their portfolio will win in the long-term.

Alternative investment is key

In recent years, the alternative property investment sector has experienced significant growth as increasing numbers of ex-Landlords experienced the benefits of receiving lucrative returns from property bonds without the hassle of managing tenants.

As a result, there are a wealth of property developments currently under construction that are financed through means of alternative investment. Strategically located and constructed for either build-to-rent or buy-to-let, the alternative property market is well-placed to offer quality but affordable housing, whilst delivering returns to investors.

With long lead times, developments currently under construction aren’t likely to feel the current financial impact of COVID-19; where even those near completion can be strategically priced or refinanced for sale.

In addition, the inevitable buyers’ market will present a wealth of opportunities for both property developers and individual investors alike, as they maximise the downturn in the economy to secure assets at a low rate to re-develop, refurbish and resell as the market recovers.

Building to a high quality and selling at the right price will be key for developers and property vendors alike, where investors looking to expand their portfolio are likely to benefit from attractive deals in both the residential and commercial sectors.

Ultimately, there is no doubt that the UK economy and property sector will be impacted by the current pandemic. However, the alternative market is built by savvy investors that take their time to source attractive opportunities, meaning the industry will bounce back quicker post-COVID-19.

As Winston Churchill famously said: “Never waste a good crisis

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