“Cash is not a safe investment . . . it is not a safe place because it will be taxed by inflation.” said Ray Dalio last year. This year in May 2022, Dalio further commented that “cash is still trash . . . and and equities are trashier.” During a time when inflation is weighing heavily on real returns, he told the investors should be better off with ’real’ assets like real estate – a position that was reflected yesterday in a piece by Guggenheim’s Scott Minerd, who said he expects real estate and art to outperform stocks over the next five years.
Here Are Why You Should Consider Investing in UK Property Market
“Cash is not a safe investment . . . it is not a safe place because it will be taxed by inflation.” said Ray Dalio, who is the well-known American billionaire investor and hedge fund manager, and has served as co-chief investment officer of the world’s largest hedge fund, Bridgewater Associates since 1985. He has told CNBC in 2021 the above comment and so far this has been so true in this year of 2022. We can see the inflation rate risen to a nearly a two-digit figure in North America and Europe and even higher in some other regions due to COVID-19, unlimited supply of money (QE) and war between Russia and Ukraine.
Just in the current month, Dalio further said that “cash is still trash . . . and and equities are trashier.” During a time when inflation is weighing heavily on real returns, Dalio told the investors should be better off with ’real’ assets like real estate – a position that was reflected yesterday in a piece by Guggenheim’s Scott Minerd, who said he expects real estate and art to outperform stocks over the next five years.
If you eager to follow one of the world smartest investors, the question is then where should you invest in? The simple answer from us will be UK.
The UK offers some of the best property investment opportunity in the world. It has always been the top choice and the most preferred market of European as well as global investors.
And with the inflation now at a recent high and all the national central banks printing money at an extremely rapid pace, tangible assets like properties are surely going to considered as a safe harbour that will draw solid demand from investors.
Below we will list some of the main reasons that you should think about allocating your investment profolio by investing into the real estate in the UK.
The current favourable exchange rates allow buyers from foreign countries to get more for their money. The Great British Pound (GBP) has been in its recent lows and so for foreign investors, it creates a great window for buying UK properties at a lower cost. So rather than only getting the return from the rental income and appreciation of the properties, investors can gain more in the future once the GBP exchange rate can rise again.
Low Mortgage Rates
Mortgage rates are also relatively low at the moment. This implies your cost of borrowing the money is low and as a result, with the same level of rental income, your investment return is of course higher than before.
Safe Investment Environment
The UK has been considered one of the safest place to invest in. It has very stable political environment and a strong rule of law basis. It welcomes foreign investment and has no restriction on the transfer of money and capital to and from the country.
Rising Demand & Undersupply
Demand and supply remain the most crucial factors of valuating the potential growth of property price. Many areas in UK will be facing a chronic undersupply of properties while demand will be on the rise due to the continuous foreign demand from Europe and Asia, especially, Hong Kong and China.
Generation Rent Concept is In Vogue
The concept of ‘Generation Rent’ is well and truly in full swing across the UK and thus directly appealing to property investors that want to build a stable income generating as well as long-term investment portfolio. According to some recent researches, nearly 4 out of 10 ‘millennials’ are still privately renting at an age 30, while nearly a third of the wider generation are expected to be renting well into retirement. Some people may see that lifelong renting as something not feasible, this has been a common phenomenon in continental Europe like Germany in which only 43% resident there are owning their home. Thereupon, this so-called “continental-style’ rules in property market will offer more security for landlords if they aim to build stable passive income.
One of the biggest factors for anyone looking to invest in UK property is the disparity between supply and demand. Many regional areas in the UK – especially those forecasting above-average price growth – remain affordable in the current market and are seeing incredible demand because of foreseeable relatively low supply.
Researches further confirm that UK renters will outnumber homeowners by 2039. This means a nearly 125 million households in a private rented sector set to grow by 24% by the next few years. This simply strengthens the view of the advantage of property investment in the UK in which the residents are heavily trending towards renting but yet the market cannot deliver enough supply to meet the rising demand.