Whilst it’s true that the Coronavirus pandemic has affected the entire world, one could argue that the economic effects have been far from equal around the globe, or even throughout Europe.
2020 was, of course, a year of unprecedented disruption and it’s to be expected that countries felt severe economic shock across that period, with short-term recessions following from widespread national restrictions being in place.
As we now approach late spring, it’s with a huge sigh of relief that we now finally appear to be seeing the end game when it comes to the lifting of restrictions. The UK government’s vaccine programme has gone better than anybody could have realistically expected, and, despite some initial problems, the European vaccination effort seems to be picking up too.
This has meant that, broadly speaking, we seem to be getting quite a good view of what each country’s economic recovery is starting to look like and where we may find ourselves by the end of the year.
After the initial shock and short-term recession, the UK government came under pressure when comparing us to our continental neighbours. As the dust is settling however, it’s becoming apparent that an economy that consists of such a large number of services and hospitality would likely always suffer to this degree in the short term.
One thing that took many commentators and economists by complete surprise was the performance of the UK property market, and certainly in comparison to its European counterpart.
European property
Property markets throughout Europe have never been quite as strong as the UK property market for a number of reasons, but even then, the performance of UK house prices, demand, and rental growth took many by surprise.
Research is now emerging that for European landlords the picture hasn’t quite been as rosy. According to Property Wire, “The average square-metre price of rental properties in the Dutch unregulated housing sector fell by 2.4 percent in the first quarter of 2021, compared to a year ago.
It was the first time prices have fallen in the five largest cities in the Netherlands. New tenants in the Netherlands are now paying €16.34 per square metre per month.
Rents in the capital Amsterdam have been dropping since the second quarter of 2020 and this price decrease continues at the same rate: new tenants paid 7.4 percent less in the past quarter than one year ago.”
The picture appears to almost identical across Europe, with similar reports emerging from Spain, France, Germany, and Italy too.
UK in comparison
If we take a direct comparison to the UK market, prices rose over 8% in many parts of the country, and rental growth has seen record increases in many cities and towns in the same period.
Demand for property has been soaring both during and after the pandemic. This is partially thanks to an increase in younger renters moving out of their parent’s house or shared accommodation into cities and towns after months of being stuck indoors during lockdown restrictions.
As a way to capitalise on this flock of young renters on the move, investment into new build apartments and building projects across cities and urban areas has surged. According to the Delloite crane survey, Manchester alone has experienced almost record-breaking activity throughout 2020 despite the numerous restrictions thanks to the pandemic.
We can conclude then that the UK property market remains not just one of the best property sectors in the world, but one of the soundest investment classes available in these current times.