Why investing in property makes more sense than putting your money in the bank right now


In uncertain times it is natural to look for secure, stable ways to grow your money that don’t carry the same high risk as the stock market. For those looking to build and profit in a sensible manner, two of the most intriguing options are putting your money into a savings account or buying property.

Using a savings account – i.e. investing with a bank – is a tried and tested investment method that is both predictable and reassuring. The many benefits of doing this include its ease, and the fact that many savings accounts allow you to access your money whenever and wherever you wish.

There are exceptions such as locked ISAs which will not allow you to access your funds without meeting certain conditions, but on the whole, putting your money into a bank means that you can save for the future at the same time as having access to your money.

Another notable benefit of putting your money in a bank is that it is one of the safest ways of investing and looking after your funds. Under the Financial Services Compensation Scheme, if a UK bank or building society that you save with goes bust, you are guaranteed to get back up to £85,000 of your savings.

However, this does not mean it is risk-free, and the main danger of saving with the bank is that interest rates are so low they are barely keeping up with inflation, if at all. When it is noteworthy that a bank is offering a savings rate of 2%, it is a sign that this could be a major problem. While your money won’t go anywhere, its value is gradually being eroded if it is sat in a savings account as inflation goes up, and you will be falling behind.

Furthermore, the Bank of England base rate is at 0.1% and set to remain so for the foreseeable future. Until that changes, it is unlikely that higher savings account rates will emerge – and even if they do, it is unlikely that they will go much higher.

Compare and contrast this to UK property investment which offers many of the same benefits as putting your money in the bank, but with a whole range of additional positives.

Much like savings accounts, UK property is a reliable investment option with a strong pedigree. Bricks and mortar is your classic tangible asset, and the ongoing supply issues in the UK (the ‘housing crisis’) ensure that your asset will be in demand for the long term. The UK simply is not building enough homes, and with the rate of housebuilding increasing by just 1% a year, this shows no signs of changing.

This is far below what is needed to meet demand. The UK Government estimates that as many as 345,000 homes are needed each year in the UK – approximately 100,000 more than are being built every 12 months. As the gap between supply and demand widens, house prices continue to increase along with the capital gains that bring for investors.

The latest house price growth data illustrate the scale of demand and the money to be made by investing in UK property.

New figures from search engine giant Zoopla show that the average UK house price reached a record high of £235,000 in August 2021. This represents a growth of 6.1% over 2021 to date and is double the rate of growth seen in August 2020.

When we focus in a bit, certain markets come into sharper relief as good bets for investors. Leading the way is Liverpool, with the city seeing 9.8% growth over 2021 so far, with Manchester not far behind on 8.1%. This backs up recent analysis from Savills which upgraded the residential forecast in the North West of England and predicted another 28.8% of growth in the region by 2025.

Furthermore, the same Zoopla report shows that sales are being agreed at the fastest pace for at least five years and that the average home now sells within 30 days. It is clear to see that demand for housing is through the roof in the UK, and until supply catches up this situation will continue.

Right now, it is undeniable that investing in property makes more sense than putting your money in the bank. The UK property market is a reliable long-term bet for investors, and the returns on offer are hugely more impressive than a traditional savings account.

What’s more, all indications are that this state of affairs will continue far into the future and reward those who invest in UK property for many years to come.

Looking for advice on the best places to invest in property? Contact our team today and find out about our latest opportunities as well as Opulent’s market-leading investment strategies by clicking here.

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