MARKET ANALYSIS
In the last 7 days we have seen changes to our environment announced by the government, namely the introduction of a second lockdown on Thursday 5th November 2020. This lockdown has been introduced to “stop” the ever-growing rate of infections and fatalities seen over the previous 3 weeks. Many would say this should have been done sooner.
However, there are key differences in this lockdown compared to the last, helping the economy stay afloat:
1) Schools, colleges and universities will remain open.
2) Care homes and dentists are staying open.
3) Property transactions and personnel may continue to operate.
4) Travelling to work is permitted where you cannot work from home.
5) A range of professional sports are allowed to continue, for example football.
The 5 points above suggest that the economy cannot take another lockdown, or we would have had the same measures as March 2020. Each of these link back to the economy in some way- schools remaining open allow parents to continue to perform economic output without having to get expensive childcare; dentists and care home fees contribute to the economy; professional sports contribute in many ways, from employment to commercial activities; and travelling to work where you cannot work from home means the government don’t have to give out furlough unnecessarily.
Property transactions and personnel continuing to operate is already great news for property investors. In addition, the recent rise in the property market (5.7% in November) has meant the government has identified the industry as a key factor to stimulating the economy. This, paired with no restrictions on travelling for work, is great news for serviced apartment operators!
WHY?
Unlike the first lockdown, there will still be lots of travel up and down the country for work. Both blue and white collar professionals are able to operate as normal. Therefore, locations of industry and significant development would be where we are looking right now to achieve high occupancy. The great thing about this is when measures start to be uplifted, the occupancy is likely to significantly increase due to the fact more people will travel to work. The tourism and leisure market isn’t a viable option right now as November is historically not a fantastic month for “staycations” (holidays/getaways in the UK) and the lockdown restrictions prevent the public from travelling for these reasons, even though many people still continue to do so.
In summary, this week brought a lot of change and a loss of confidence in the market. However, it has also brought mass opportunity for those who can identify the key locations where travel for work is essential. Having a rent to service accommodation property in these selected areas will bring you high demand, and therefore should generate consistent monthly profits which will increase as the lockdown measures decrease.
Email us on info@ppsltd.net or alternatively call 07976198079 for more information on how we are the perfect candidates to find you these high demand properties.
