Is it easy to find the right investment opportunity in today’s markets?
The more commonly known sectors and products that continue to provide a good, or even a great ROI, over a period of time, are investments such as: Bonds & ISA’s, hedge or private equity Funds, ETFs, Stocks & Shares (historically shown an 8% – 10% average, over a 20-25-year cycle), Real Estate, Loan Notes, REITs, Commodities, Peer to Peer lending and Annuities.
Irrespective of the many options to choose from, all investors, from newbie to seasoned-pro, are seeking a moderately sound vehicle, platform, product – tangible or non-tangible – to place their money/savings into, and of course, aiming to secure the best return-on-investment.
Especially, now, because let’s face it, anywhere is better than the bank, right.
We want to understand what’s recovering from the 2020 lows of some of the better-known volatile markets that have been riding the coronavirus pandemic wave, compared to those that have seemingly sailed through it.
Worldwide there is so much happening which in turn impacts the economy and the property and investment markets.
The Property Market
Buying property investment is one of the most lucrative ways to make the most out of your savings, with more and more people seeking out advice on property investment.
The term “as safe as houses” we are all familiar with. Is it categorically true of the property investment market?
I’m not in a position to answer that per se, but we do know, with not too deeper research, property since the 1960s has tended to always beat inflation.
In the last 12 months, we have seen the unprecedented effect on the UK economy due to the coronavirus pandemic. The impact saw the UK plunge into a recession and in the Spring Budget 2021 the chancellor reminded us borrowing and GDP shrinkage is at record highs outside of wartime.
Robustly, and remarkably, the property market, which was closed between March and May during the UK’s first national lockdown, came out the other side and saw extraordinary growth by the end of last year.
House prices rose to a six-year high according to Nationwide building society, rising 7.3% by the end of 2020, thanks to the government’s job and household income support schemes and the Stamp Duty Holiday it introduced, which continues in 2021.
Real estate attracts investors and landlords and provides many with sustainable, medium to high rental returns year-on-year, as well as capital growth, and a low-level of volatility compared to many markets of similar returns.
There are of course huge regional variations in property prices in the UK. The south, particularly the South East can cost double per square foot than that of a comparable property in the North West, and when it comes down to annual yield percentage, the return can be typically 2 – 4% lower in the south, especially London.
How to invest £100k for the best returns?
Let’s look at two property investment sectors that are offering great return on investment right now.