Is property a sensible investment at the moment or are there better places to look?
Everybody is talking about rises in the cost of living. There’s a lot of turbulence in the current economy, the value of the pound is fluctuating, and things are looking pretty uncertain. So in the wake of covid and Brexit, and with the political uncertainty that surrounds us, what is the climate like for investors? Is property a sensible option at the moment or are there better places to be investing?
In times when the stock market looks unpredictable, there’s a tradition of looking at bricks and mortar as reliable and tangible assets when compared to the more abstract notions of stocks and shares. But while the stock market is currently in flux, we’re also looking at rising interest rates, which are making high interest savings accounts look more attractive than they have in several years. So might money be better off left in the bank?
The lure of property is resilient, as Aaron Strutt of Trinity Financial says, simply because there is a lot of demand for it. “The UK property market is generally seen as a safe bet even though our economy is going through a challenging period. At the moment we do not build enough new homes and our population is growing.”
Agents all over the country are reporting a lack of sufficient stock to cover demand, and they all predict that this is set to continue, keeping values strong. Looking at population figures, says Strutt, shows that the demand for homes can’t even begin to diminish in the near future, as immigration is set to rise and thereby create even more demand for homes. He says: “Most people tend to buy a home or invest in the property market expecting the value to rise over the longer term. They want to own their home rather than rent. The population of England and Wales grew by more than 3.5 million (6.3%) since the last census in 2011, when it was 56,075,912. Recent figures in The Telegraph also highlight that more foreign nationals will come to the UK this year than before Brexit. Numbers will also rise as we welcome Ukrainian refugees and Hong Kongers.”
As demand for rental properties continues to remain strong, investors looking to produce an income are still doing well from buy-to-let, though changes in legislation and regulation mean that they need to think carefully about where to invest for the best yields. As with anything, investors need to do their research. As the cost of building work increases, it may not be as easy to increase value with a simple loft conversion as it was a few years ago, but for anyone interested in the long-term, property remains a sensible option.
We all know that there is no such thing as a risk-free investment. But people will always need homes and therefore property will always have value. Even if there is uncertainty ahead, houses are looking likely to weather any storm.
