Since the Coronavirus outbreak, there has been some drastic changes to the world we live in of which we still cannot predict or measure the impact this is set to have on the UK economy. Right now, we are in a difficult position of uncertainty where we can only speculate how quickly the economy will rebound once the lockdown has been lifted.
Chancellor of the Exchequer, Rishi Sunak has had the weight of the UK economy on his shoulders since the lockdown thus his comments this week are of particular importance to Elavace and we understand the significance of these predictions to all current and budding property investors. In relation to the UK economy, despite his initial hopes for a swift recovery, the chancellor has warned it is “not obvious there will be an immediate bounce-back” once lockdown restrictions are eased.
It is still so early in the process to know how much money has and will be spent to minimise the toll this lockdown will have on the UK economy. Sunak's warning came as figures released by the Office for NationalStatistics (ONS) showed the number of people claiming unemployment benefit soared to 2.1 million in April. An increase of as many as 856,500 claims reflects the impact of the first full month of lockdown, claims the ONS.Astoundingly, this is the highest number of benefit claims since 1947. That means one in nine people in some parts of Britain are now out of work.
Needless to say, the government has made a number of changes to who may qualify to claim work-related benefits during the pandemic and not all claims will be from entirely jobless people, as people can also claim due to a reduction in income. However, this figure is the first of many that show how much pressure COVID-19 is placing on the jobs market.
Rishi Sunak went on to admit he felt "all economic forecasters and economists would agree the longer the recession is, it is likely the degree of that scarring will be greater". Unfortunately, lifting the lockdown in itself, is a process. He said that even when the government can reopen retail in England on the 1st June as planned, there will still be restrictions that will impact how people can shop. This will mean that the reopening of the huge retail sector will not soften the rate of unemployment with immediate effect as the restrictions will impact the level of footfall and spending on the high streets, according to Sunak.
There is no telling what the rate of unemployment will be when the year draws to a close. Sunak told, “Obviously, the impact [of the coronavirus pandemic] will be severe.” At this point in time, it is simply not possible to accurately predict how unemployment will unfold, these jobless figures only cover the first week of lockdown. The number of job losses will only continue to rise in the weeks and months ahead as businesses of all shapes and sizes succumb to COVID-19. Jagjit Chadha, director of the National Institute of Economic and Social Research, told the BBC: "We can reasonably expect unemployment to rise very quickly to something over 10% - something we haven't seen since the early 1990s."
The total number of job vacancies falling by a staggering170,000 to 637,000 in the 3 months leading up to April is another clear indication of the bleak state of employment the country finds itself in. Though the signs of a significant downturn in the regular jobs market are clear for all to see, unemployment would have undoubtedly shot through the roof if it were not for the extraordinary government support package. This vacancy drop signifies there are fewer jobs available for those who unfortunately, lose out on income. These numbers will only get worse with next month’s figures, which is why Elavace are here to help prepare for the storm that is still to come.
What if I lose my job?
This is a common concern from many of our investors, not to mention the vast majority of the general public. We have quickly learnt that this invisible global enemy takes no prisoners whether socially or economically. In the three months leading up to February when employment climbed to record highs, nobody could have ever predicted the landslide the employment world would face. Fortunately for Elavace investors who have already or are set to become jobless, now more than ever they are wreaking in the benefits of obtaining more than one income.
We have been astounded with the level of appreciation from investors who were set to face crippling economic challenges for months or potentially years from now. Elavace has always stressed to clients and readers of our UK property reports the importance of spreading risk through acquiring multiple incomings in the event of any shortcomings. Of-course, as previously stated, neither us nor anyone else could have ever predicted the magnitude of a pandemic unfolding. However, people are almost always unbeknown to economic challenges that lay ahead which is why it is wise to seek another mode of income in the event of another falling.
The highly common response from many of Elavace’s current investors has been to expand their portfolio further. Given the current circumstances, the most in demand type of investment has become built and tenanted properties which are flying off the shelves and fast. These properties are no longer under construction and have tenants ready and waiting to move in.
But what if my tenants lose their job and cannot afford to pay rent?
In these times of crisis, people will always need somewhere to live and for this, we pride ourselves in providing assurance to our investors with queues of tenants ready and waiting to move into their new home.
We at Elavace share a combined 50+ years of experience in the property market, therefore we are no stranger to economic scares in the UK and have always conducted our business in the best interest of our investors in times such as now. This is why all of the tenants who move into any one of the properties we manage, are required to sign a fixed term tenancy agreement which means they must fulfil their full rental commitments for a 12-month term.
The security of your investment is our main priority- this is why we go one step further in offering our clients rent guarantee insurance policies which are designed to provide cover in the event of a tenant defaulting or falling into arrears to ensure your income is not affected. The policies include:
· Nil Excess
· Payable until vacant possession
· Cover limit of £2,500 rent per calendar month
· Total claims limit of £50,000
Now when you have invested into any asset, you must always ensure you have a safety net ready for when any problems arise, so you are never left emptying your pockets for a sudden emergency. It's common sense really. If you own a vehicle, you can never know when lightning might strike, and you are left on the side of the motorway with blinkering hazards lights and your head in your hands. For this exact reason, you plan ahead and have insurance ready. Property is no exception to this- which is why we also offer landlords and buildings content insurance as well as a Rent on Time policy.With this policy in place, particularly in this current economic climate, you can have the peace of mind that you are 100% protected in the event of a tenant defaulting and will never face the loss of rental income.
This means that despite the current employment scares, with this type of investment you will have an immediate influx of income as well as insurance in place if the worst happens and tenants cannot afford to pay rent.Whether or not you are facing a loss of income, it is wise to secure a fixed long-term income in the wake of one of the most economically challenging times this country has ever faced.
Interested? As previously stated, these properties are currently in high demand from investors and so there are limited units available now. Elavace are here to guide investors through this economic crisis and the best start we can make is offering you the last of these stylishWishing Well Apartments. Below are some of the final units available:
Wishing Well Apartments are reserving fast so don’t miss out on this exclusive chance to reserve Apartment 27. This fully complete two bed apartment is pre-tenanted to generate immediate rental returns and is set to deliver double digit capital growth. Located in a major regeneration zone undergoing more than £5bn of development. If this isn’t already a buyers dream, this exquisite apartment also comes complete with a free parking bay worth £10,000!
Of the final remaining units at Wishing Well, Apartment 5 is still available, delivering monthly gross income of £650 and NET income of£510. This is a fantastic opportunity to acquire a stable and income generative property asset at a below market price of just £99,000. This is an unprecedented price for a 2-bedroom apartment in the development’s local area.
If you are seriously interested in any one of these properties, we recommend you act swiftly and get in touch with our sister company, Elavace Estates, who will be more than happy to take on any enquiries you may have and arrange a video showing of the units.
We will be available during the hours of 9am - 5pm Monday toFriday with effect from 16th March 2020. You should still call us on 0151 8080697 and you will be given a series of choices, but please be aware in most cases, your call will be diverted to a colleague’s mobile. We are all available on email:
· Georgiaw@elavaceestates.com (Repairs/maintenance& landlords accounts)
· Somonet@elavaceestates.com (Conducting viewings, inspections, tenancy renewals)
Alternatively, visit our site here: https://www.elavaceestates.com/
We look forward to hearing from you!