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Negative interest rates: time to invest in property?

What would sub-zero rates mean for your savings?

The Bank of England recently set the lowest interest rate (0.1%) since being established over 300 years ago...

As the nation begins to re-build, there are many suggestions circulating that the base rate could and should be set below zero. Negative interest rates would mean that any money that you have in the bank would inevitably decrease in value. 

In a world where sub-zero rates could shrink your savings, you may be wondering where is better to invest your hard-earned cash? Unlike stocks, the good thing about investing in property is that it’s widely considered one of the safer investments to choose from. Particularly if you’re investing for long-term gain.

We explore the pros of investing in property at a time when leaving money in the bank could mean losing it.

The investor refurbishment strategy

A refurb strategy is perfect if you have the money to take on a hands-on project but you also want to keep hold of the property and benefit from capital growth in the future. Rather than sitting in the bank, you could use your cash to refurbish a property and then sell it in future.

If you’re time-poor, but you’re planning on buying a property and holding onto it for the long-term, then you might want to consider the buy to let strategy below.

The buy-to-let strategy

Investing your money in a buy-to-let is one of the simplest property strategies you can get, and it’s quite hard to get it wrong. Unlike money in a bank, buy-to-let allows you to benefit from short and long-term gain.

In the short term, you’ll be receiving rental income each month from your tenant. And long-term your property will increase in value. Long and short term gain.

Is now the time to diversify my portfolio?

If you invested every single penny into the stock market and it crashed – what would happen? You’d lose your investment. This isn’t a position we want you to be in. The same applies to property. The current market means now is a great time to diversify your portfolio. A good way to do this is by investing in different locations to the ones you’d usually invest in. We have an entire article about the best buy to let hotspots for 2021.

Is now a good time to sell?

It’s no secret that the UK property market has gone from strength to strength in the last 12 months. During the lockdown, the desire for suburban homes with workspaces and gardens, supplemented by the stamp duty tax holiday, created huge demand from buyers. According to The Times, The property market is at its strongest for a decade, with buyers piling in at a record pace’* The recent announcement that the stamp duty tax holiday was to be extended resulted in average house prices increasing by £2,484 (0.8%) in a single month.  

Many property forecasters are predicting continued growth not only in the coming months but for years to come,** and this is not just restricted to London but all across the UK. Selling your property when prices are high is always a wise decision. 

If I don’t want to buy a new property, how can I invest in my own?

If you don’t want to put cash into a new property, then investing in the property/properties you currently own, might be an option. There are many ways that you can increase the value of your home so you’ll make a profit when you come to sell. From simple jobs such as painting the walls, to expansive projects such as adding solar panels or new insulation. To get a better understanding of the current value of your home and the way in which you can increase its selling potential, book an expert valuation with us today. 

Our local agents are trained to understand the demands of the marketplace and know exactly what buyers in your area are looking for. They can advise you on the work you should undertake and help you get the best possible price for your property. 

Next steps

As you can see, property offers plenty of opportunities. By the end of the year, you could have your first investment property, be on your way to building a strong investment portfolio, or have increased the value of your own home ready to sell. Equally, you could leave all of your money in the bank – the choice is yours. Choose wisely! 

If you have a property and you’d like to know how much you could sell or let it for, a valuation is a great place to start.

How much could I earn from my property?