Investing in Property Remains a Firm Bet
Investors has been using property for years to build up their portfolio and make a return. Property investments are not necessarily as lucrative as some other investment opportunities that offer a higher return, but they also don’t have the associated risk. It is found that for those looking to make long term investments, property is one of the best way to get a return on your money.
Hearthstone Investments has reiterated this idea, with the release of figures which show over the course of a year the returns made through property investment was around 7%, significantly lower than the 12% made through equities. However, the positions are reversed in long term results. After 10 years both investment tyres record around an 8% return, whereas at 15 years property investments reach 12% and equity drops to less than 8%. This stable long term return on an initial investment is preferable for a lot of people, especially given the current political uncertainty and the effect it has been having on the stock market.
For a while the most popular sector for investment was the buy-to-let sector, and it has been estimated that there are around 2 million buy-to-let investors in the UK and they are invested in a market that caters to more than 5 million people in the private rented sector. This market is usually strong and the rise in property prices is benefitting the private rented sector as it means that younger people are staying in the sector for longer aa they are unable to afford to buy. However, housing prices are becoming a political issue, with the government trying to discourage buy-to-let investment and increasing stamp duty levels for second buy-to-let homes. The government has also reduced the amount of tax relief that can be claimed by landlords. As part of this investors are starting to look more towards the luxury end of the market, but the property market remains a firm investor favourite.
