Please assign a menu to the primary menu location under menu

Real Estate

Decline in Property Investment Leads to Increases in Other Types

Decline in Property Investment Leads to Increases in Other Types

According to recent data from UK-based mortgage provider Nationwide, house prices across the country rose by 11% in July, a further increase from the 10.7% in June, despite the ongoing cost of living increase fuelled by high energy and food costs.

The price increase now means that an average house in the UK now costs £271,209, an increase of £55,000 from February 2020. This is also the twelfth consecutive increase in terms of house prices, with price rises in the double digits for nine months.

However, these increases are compounded by low housing stocks, with the number of properties currently up for grabs at a 40-year-low. This is driven by property owner uncertainty and high inflation levels that could put off people looking to finance a move. Nationwide also reported that they saw a dip in the number of mortgage transactions during the last few months, again driven by the inflation rate that currently sits at 9.4%.

Many potential owners are finding themselves priced out of the market as lending costs increase along with the standard cost of living. Tightening purse strings has also led to people having less money available for deposits, which is a challenge as prices soar. The data collated and published by Nationwide showed that the average property price was around seven times the average income in the second quarter of 2022, the highest since records started in 1983.

All in all, a continued decline in investment in property is expected to be observed in the UK over the following months and potentially even longer. This is due to the limitations placed on people, who may instead look at other options when it comes to short and medium-term investments.

Other Forms of Investment

During these times, there has been an increase in the number of people investing in the stock market. Recent data shows that around a third of Brits own shares, with a further two-thirds expressing interest in buying them in the future. However, it’s not just shares that are of interest. Forex, Crypto and CFD trading are all popular investment options now. For example, in the case of CFDs, investors can speculate on the short-term increase or decrease in the value of an asset without having to buy it. There are lots of options for this kind of trading online, with platforms providing trading of CFDs in various commodities, equities, currencies, indices, and more.

Of course, investing in property will always be necessary for investors. While the sector may be facing a lull, for now, this is likely to diminish in the future. Investing in real estate will always be an essential part of any portfolio. But we will also see the diversification of investments as people become more financially literate and savvy, seek other means of distributing, and looking to capitalise on their wealth.

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.