From income stability to high demand, the reasons why property in the United Kingdom is a wise and increasingly successful investment.
Numerous individuals have been instructed by the education system and the mainstream media to save money in a bank. In the past, when interest rates were higher, this may have been a viable alternative; but, circumstances have changed. Now, if you keep your savings in a bank, you’ll see the value of your hard-earned money progressively erode.
Central banks continue to put more currency into circulation, resulting in the devaluation of fiat currency. In the meantime, banks continue to pay interest rates on savings that are substantially lower than even the stated rate of inflation. Therefore, if you wish to maintain your current spending power (much less grow it), you must locate a method of capital deployment. The UK property market is my response as a multimillionaire real estate investor.
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Low availability
In the past, currencies were backed by gold, which restricted the amount that governments and central banks could generate. Today, nothing supports currency, so central banks can continue to generate more and more. Because printing money does not increase the number of goods and services on the market (the real wealth of a nation), the production of new currency devalues the existing amount. Consequently, your purchasing power will diminish over time.
Therefore, if you want to save money, you must discover a place with a limited supply and a growing demand (if something has a restricted supply but no demand, it will not retain its worth), and you must be certain that this demand has been demonstrated through time.
The United Kingdom is a compact nation with a limited land area. Additionally, it is a popular location for people from all over the world. Because of continuous immigration to the United Kingdom, housing is constantly in high demand, and there are no indications that this situation will change soon – there is a limited supply and rising demand.
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Leverage
When you have money in the bank, you can only benefit from the exact amount placed. However, when you purchase a home, you can put in a little down payment and have the remainder covered by a mortgage. It is significantly less hazardous than other forms of leverage, though.
If you use leverage to purchase Bitcoin, cryptocurrencies, foreign exchange, or stocks and shares, you run the danger of being liquidated and losing your entire investment. On major leverage trading platforms, you will therefore find disclaimers such as “68% of retail investor accounts lose money…”
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Generally speaking, the UK real estate market is steady enough to warrant the usage of a mortgage. If you have selected a property with a high cash flow, you can wait out a decline in the asset’s value while being compensated to hold it.
By employing tactics such as “buy, refurbish, refinance, rent” (BRRR), you can make your money go even further. BRRR entails purchasing a property in disrepair, renovating it, and then refinancing it at its net worth. If done correctly, the new mortgage will pay both the cost of the renovation and the purchase price of the house, leaving you with enough beginning cash to do it all over again!
That is extraordinary leverage, the kind that allows a tiny pot of money to grow over time into a portfolio worth millions of pounds. If your funds are in a savings account, you are unable to accomplish any of the above.
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liquidity
If you keep your money in the bank, you are likely to earn less than 1 percent interest, which is significantly less than inflation and results in a net loss. If, on the other hand, you select a high cash flow property in the United Kingdom, you will be compensated to hold an asset that is expected to appreciate over time. It is essential, however, to select a property with cash flow in mind, so that even if the market declines, you can wait patiently for a recovery.
To discover a house with strong cash flow, you may need to seek one outside of London. Don’t be afraid to search for properties in the Midlands, the North of England, and the valleys of Wales. (If you are a foreign investor, it may make sense to collaborate with a deal source who knows these areas.)
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