The Coronavirus Could Have Far-Reaching Effects on the UK Housing Market According to Reports

While we still don’t know what the human impact of the coronavirus will be worldwide, one thing is for sure, and that is that it will deeply transform the way we build both here and around the world.

This new concept of “social distancing” will surely influence building and buying decisions, and change the way property development will be approached forever.

But it also affects the markets directly in many ways. Real estate’s view as one of the ultimate stores of value could have a short-term effect on acquisitions. But it could also have a slowing down effect on certain developments, especially those that are not in line with the direction the markets seem to be going towards.

Coronavirus is Spurring a Buying Panic

It’s no secret that the coronavirus has been nothing but disastrous for a wide number of industries. The tourism industry is at a standstill, and exchanges everywhere have been plummeting due to uncertainty.

This pushes many investors to look into a safe haven. If you look at global numbers, many more people invest in the stock market instead of a more stable option like real estate. This is mainly because of the “hands-on” nature of this investment, and the fact that it is more difficult to liquidate.

But what this crisis has shown us is how vulnerable global markets can be, and how volatile they can be as well. They might provide great returns and benefits, but they’re not as safe as a store of value as many would have you imagine.

Real Estate Investment Has Outperformed Stock Markets

Many people may not be aware of this, but real estate has been steadily outperforming stocks over the last twenty years. As a matter of fact, those who would’ve invested money in the real estate market over twenty years ago would’ve gotten around twice as much from their property than through stocks.

Property also has many advantages over stocks, especially in a time of crisis. For one, it is much more tangible, which allows for great leverage. Investors can then choose to diversify their assets or use their current property as collateral for financing.

Real estate is also one of the best passive, consistent, and predictable sources of income that you can find. And there are tons of completely hands-off solutions as well. While the stock market can offer great returns, it also comes with great uncertainty and fluctuations.

And not only can you get revenue in the form of rent payments, but also through appreciation. Developers who manage to find the best locations and plans depending on the local market’s needs and the future will have a definite advantage over other types of investors.

Coronavirus and Commodity Prices

Coronavirus is also having an effect on commodity prices, which will also have an impact on development costs. But in this case, it could actually be a blessing in disguise.

With the decision by the Bank of England to lower the interest rates to 0.25%, we can expect some cash to be injected back into development; development that will probably be made with new needs in mind.

But the coronavirus is also actually driving many commodities down. Take concrete, for instance. A recent study found that cement prices could end up stagnating over the next coming months. Recent analysis has found that the impact of the virus on the development sector hasn’t been felt yet, but that the prices of cement are very unlikely to rise under such uncertainty.

This is why many experts urge new developers to keep an eye on the concrete prices using a concrete calculator UK. A concrete calculator like that offered by MixIt will allow you to calculate the exact quantity of cement you might need on a project. You can also use their screed calculator to calculate costs and avoid surprises. Their concrete mix calculator allows you to check the cost for various mixes, which will be forwarded to their team of experts that will be able to advise you on the best mix for your project.

The Construction Industry to Feel the Jitters

Unfortunately, the construction industry might have to suffer from the effects of the virus as much of the materials imported come from China. However, this could be an opportunity to diversify their supply chains and bring some of the production closer to home.

According to an industry official, we should wait until we actually see a reflection on the market before pressing the panic button. While growth should be slower, it shouldn’t be at a standstill, and could eventually open the door to opportunities for savvy developers.

Conclusion

The coronavirus will have an undeniable effect on the housing market and the economy as a whole. The scope of this effect is still to be seen and is just as uncertain as the future of the pandemic itself.