Aimee Rogers

Just about every sector of the economy was touched by the effects of the pandemic in some way or another. Online retailers enjoyed surging sales as bored brits looked for new toys with which to distract themselves. High streets, on the other hand, remained deserted.

The housing market felt the impact of the lockdown measures in profound and distinctive ways, and it’s difficult to say with certainty what the long-term effects will be.

During the lockdown

The housing market was effectively put into suspended animation. After all, if you’re not allowed to leave your house, it follows that you won’t be able to inspect any other houses which you might like to buy. Growth in house prices slumped to 1.8% in May, according to Blend Network. This was down from 3.7% in April. Though the growth was actually negative for the month, the yearly trend was upward.

After the lockdown

Following the relaxation of the lockdown, estate agents and solicitors across the country have found themselves inundated with pent-up demand. This has created upward pressure on prices, as would-be buyers look to force their sales through with a hefty injection of cash. However, there will come a point where this pent-up demand is exhausted, following which, many experts predict, house prices could once again fall to their previous levels.

Measures taken by the government to stimulate demand

The government is keen to keep demand high, as a collapse in the housing market could have dire ramifications for the economy more broadly. Among the measures introduced is a cut to stamp duty, saving would-be buyers up to £15,000 if they decide to move before the end of the financial year. This has forced many would-be buyers to bring forward their plans, for fear of missing out on the giveaway.

What about Holiday Homes?

All of these market forces are acting upon the holiday homes business, too – which has enjoyed a similar surge in sales since the relaxation of the lockdown. While the definitive measures will take a while to come out, the anecdotal evidence suggests an almost overwhelming spike in activity. According to Park Holidays, a holiday-homes provider, the demand has been unprecedented: “We are staggered by the level of interest in people keen to buy their very own holiday home,” said a representative. “Sales during the last 3 weeks have been almost double that of the previous year and the demand is still strong. “

COVID-19 has had an impact on everything from our health to the way we shop and even global markets. Few countries have escaped the virus, leading to a huge economic crisis.

While it might not seem like the best time to invest, now is actually a great opportunity for investors. So, what should you know about investing during a financial crisis?

Why could now be a great time to invest?

There are a lot of potential benefits of investing during an economic crisis. As the global markets have been hit, you’ll find stocks and shares are cheaper now than ever before. This gives you the opportunity to invest in stocks that would have otherwise been unaffordable before the crisis.

Most people are getting out of their investments due to fear and panic. This leaves the markets wide open for new investors. It is said that the worst thing you can do during a financial crisis is nothing. So, if you’re willing to take the risk, now could be the perfect time to invest.

High risks, high rewards

While there are benefits of investing during a crisis, the high risks can’t be ignored. Not all markets will recover, meaning there is a big chance you could lose what money you do invest.

Of course, the higher risks mean the rewards are also higher. During a financial crisis, you can expect investments to be riskier but much more lucrative if they pay off.

A great way to minimize the risk is to use the services of financial advisers. They will be able to help you determine which investments pose a lesser risk.

Things to avoid when investing during a crisis

If you do decide to invest, there are a few things you’ll want to avoid. For example, if you don’t have any savings to fall back on, investing is probably a bad idea.

You’ll also want to avoid touching your portfolio for at least seven years. So, if you’re looking to touch your investments soon, you’re not going to find it profitable to invest during a crisis. Also, ensure you’re choosing less risky stocks where you can. Some stocks are definitely considered riskier than others, particularly in sectors that are struggling to survive.

Overall, investing during times of financial crisis can provide great opportunities for businesses. However, it can also be extremely risky. It’s important to understand your options and seek professional advice if you don’t want to lose further money during an economic downturn.

How has COVID-19 Affected the UK Housing Market?