Is property still seen as a lucrative investment?

Many have viewed property as one of the best ways for investors to gain favourable returns for some time now. However, in the current economic climate, is this still the case? The consecutive rise in interest rates since December 2021 has left investors questioning whether this is still the best method.

Paul Darley, our Managing Director, has taken a deeper look into this question, to help decide if property is still the right investment strategy for you.

What do the statistics show?

Recent studies show that 89% of property investors have still seen positive returns from their portfolio in the last 5 years, and 71% stated they haven’t seen a decline in the value of their properties despite the hike in interest rates.

What does this mean?

Whilst on the surface this is good news and suggests the residential property market is still going strong, there were also indications that due to concerns about the market, decisions made around these investments did change from previous strategies before rises.

For example, research has shown that 55% of investors didn’t expand their portfolio due to the uncertainty of the market, with 29% planning to ‘wait-and-see’ before purchasing any new properties.

Additionally, around 1 in 3 admitted to being worried about the conditions of the property market and considered the possibility that their portfolio may not remain profitable in the future.

This wasn’t solely down to the rising interest rates and an increase in inflation. Legislative changes have also created a cause for concern.

So, what can be done?

Even though the value of property investments has held firm whilst facing a tough economic crisis, many are not confident this luck will hold and are becoming more and more cautious about the future.

Over half of investors asked said that they anticipate a fall in house prices, with 13% expecting this to be a major crash of £30,000 or more.

If you’re feeling concerned about your investments, it’s worthwhile getting in touch with a financial advisor as they can guide you through the challenges and provide you with confidence in your investments.

Here at Wealth Experts, we can help give you the peace of mind that your money is working hard for you, and you’re not exposed to too high a level of risk.

If you have any questions, you can get in touch with one of our advisors here.