One way that recessions affect the property market is by impacting house prices. This depends on the severity of the recession. If there is a prolonged slump and rising unemployment, house prices can fall, and this negative effect will be more pronounced in less desirable areas. For example, historically, it has been less likely to hit investment opportunities in London, Manchester, or other in-demand markets. However, in a very severe recession, property hotspots can still feel the ill effects, just not as much as other more susceptible markets.

Interest rates also usually fall during a recession, making it more affordable to borrow money and credit, encouraging spending. If the cost of borrowing is reduced, banks and building societies may offer better mortgage rates. However, most recessions don’t last long enough to affect mortgage rates significantly.

Further reading: Find out about the ins and outs of property investment, such as the rules surrounding living in a buy-to-let property and buying property through a limited company.