After five years of wallowing in the darkness, property investment opportunities are showing signs that they could be about to make a comeback. Since 2008, as we all know, the UK property market has been in one of its biggest slumps ever. But now that the economy is showing signs of improvement (albeit gradual) and is unlikely to go back into recession, it has been suggested that property investment could also be on the rise.
Many of the industry’s investors who have opted for underweight property investment over the last five years are now moving towards a modestly overweight strategy, suggesting that the market is returning for investment in more expensive property. There has also been a shift in the way that people, on the whole, are investing their money. With the return on investment of bonds in decline, many have looked towards property investment. Traditionally, charities invested a lot of money in bonds and even they are among those switching from bonds to property investment.
Many of the banks who acquired property during the recession are now trying to sell, therefore increasing the supply of property and making it more accessible to people. However, this could also have an adverse effect on capital values and rent. But, the yield for UK property investment is still over 6% and is still attractive to most property investors.
If property investment is on the up, then it is important to keep our feet on the ground and understand that rather than being a whirlwind of success for everyone, it is likely only to be a modest success. So, don’t go investing in anything and everything, keep it simple for now.