With the Bank of England putting up interest rates and the Renters’ Reform Bill looking to redistribute the rights of landlords and tenants, many people will naturally be having concerns as to whether investing in bricks and mortar is the right option for them… be assured that that property is always a good investment, whether you own it as a landlord or are a lender, using alternative investments such as property bonds.
These days good quality homes are hard to find. In fact, two of Britain’s biggest housebuilders, Bellway and Crest Nicholson, recently stated that demand for new homes continues to outstrip supply despite the downturn in the economy. This is causing rents to rise at their fastest pace for 16 years according to Rightmove, with the average cost of renting a home reaching a record £1,126 outside of London and £2,257 a month inside of it. These figures will only increase in the months ahead as tenants compete for what is available.
There are of course caveats to this. The UK economy is going through some difficult times at the moment so investors must think smarter… That means having a sound strategy, sticking to it, and of course knowing your numbers inside and out. Basically how much you can afford and what you expect to get back.
Would be landlords must be clear that property is a long-term investment, not a “pump and dump” or “get rich quick scheme”. You’re looking for a regular source of income, plus a potential long-term yield as the value of your property increases.
If you are looking for something more short-term, then property bonds might be the better alternative. Not only is the entry level low, but you can expect high rates of interest and regular payments. You can also get back your original investment within two to five years depending on your agreement. Mostly importantly, and I say this for the time poor or those who aren’t natural people pleasers, you don’t have to deal with demanding tenants.
London Stadium Associate Partner HJ Collection has a managed Property Bond portfolio comprising of multiple contractors/developers, and therefore providing maximum diversification over multiple developments, unlike conventional property-backed loan notes.
To find out more about property bonds and how HJ Collection can help you, visit: https://www.hjcollection.co.uk/