It’s no surprise that ‘investing for the future’ and ‘making money’ are the number one and number two reasons respectively for investing in any area, and according to independent research by CensusWide the top five things people want to invest in are:
- Property: 40.3%
- Land: 20.9%
- Gold: 19.6%
- Stocks: 15.8%
- Shares: 15.5%
There is a clear divide between the number one actual and investment, with ISA’s being pipped to the top 5 at 13.6%. This preference for property, land and gold investments represents a strong need for tangible, real-world and potentially less volatile investments for future planners and those seeking to make the most of their own retirement.
Yields and Capital Growth must be considerations wherever you’re investing – especially in property – whilst short-term so-called “flippers” are increasingly finding it difficult to find the right flip, those with time to allow property values to grow over mid-term periods can reap the benefits of both annual yields and long-term capital growth.
For example – investing £50k into a property, off plan or otherwise – with a mortgage on the remaining amount could allow the investor to not only expand their capital through market growth but also create long-term passive income post mortgage term. Factor in small yields through rental income and there’s a clear pathway to generating a comfortable retirement, nest egg or even inheritance.
Repeatable, scalable and importantly accessible to the majority – whilst all investments carry their own risks, property consistently delivers growth over the mid-term and long-term according to the Office for National Statistics (ONS), showing a whopping 50% growth in prices from 2005 – present.
Capital growth as above may be the primary goal for some investors, especially those in the South East whose appetite for making money through property investment topped our responses with 37% citing it as the primary reason for investing in property. Yields, however, whilst not as headline-grabbing as 50% capital growth, can’t be overlooked. A 6-7% yield practically applied, can either provide shorter-term passive income whilst protecting capital in bricks and mortar for interest-only mortgages or help savvy investors to repay any LTV for Capital and Repayment mortgages. Ultimately balancing the benefits of time and capital available with financial goals.
Protecting your own future
So where does this leave you and your family? Are you sipping coffee admiring the lawn on Monday morning or trying to make the most of state pensions? Are you one of the 60% of UK people that have started to invest for their future or part of the 40% that haven’t?
Everyone starts somewhere. Every investor seeking to build wealth for retirement, family security, inheritance or to achieve financial freedom – whatever your reasons, having a clear plan and trusted partners is key. If you’re one of the 40% of investors looking to make the most from property investment we’ve shared several of our best below – mixing off-plan new builds for maximum Capital Growth with ready-to-let opportunities for short-term rental yields. We’ll see you on the lawn.