Investing in UK property has been a popular choice for investors, both domestic and international, for many years. We personally like to invest in a diverse range of investments such as equities, bonds, commodities, crypto and precious metals. However property is our primary investment for many solid reasons:
One of the most attractive features of UK property as an investment is that it is an appreciating asset. This means that its value generally increases over time, making it a potentially profitable long-term investment. This appreciation is driven by a range of factors, including economic growth, population growth, and inflation.
The return on investment (ROI) for UK property can be very attractive, especially when compared to other asset classes. Historically, property has outperformed equities and bonds, with average returns of around 8-10% per annum. These returns can be achieved through rental income, capital appreciation, or a combination of the two.
The UK has a growing population, which creates demand for new housing and increases the value of existing properties. According to the Office for National Statistics, the UK population is projected to increase from 67 million in 2020 to 73 million by 2041. This growth, combined with limited supply due to restrictive planning laws, creates a situation where demand for housing exceeds supply, driving up prices.
One of the advantages of investing in UK property is the variety of available strategies. Investors can choose from a range of approaches, including refurbishments, commercial conversions, and new builds. This flexibility allows investors to tailor their investment strategy to their individual preferences and risk tolerance.
The restrictive planning laws in the UK prevent supply from keeping up with demand, which is another factor that makes UK property an attractive investment. This creates a situation where demand for housing exceeds supply, driving up prices and creating opportunities for investors.
Despite the increasing demand for housing in the UK, we are not building enough houses to meet this demand. This means that the supply of housing is limited, which can create a situation where prices continue to rise over the long term.
Leverage is another advantage of investing in UK property. By taking advantage of mortgages, investors can amplify their returns, allowing them to generate higher ROI than they would with other asset classes.
Finally, inflation erodes debt, which means that over time, the real cost of a mortgage decreases. This can make property investment an attractive option for investors looking to protect their wealth against inflation.
In conclusion, UK property is a highly attractive asset class for investors due to its appreciation, ROI, increasing population, variety of available strategies, restrictive planning laws, limited supply, leverage, and inflation protection. While there are risks associated with any investment, the benefits of investing in UK property make it a compelling option for many investors.