Recent comments from the Bank of England have highlighted growing concern that global stock markets may be overvalued and vulnerable to a correction.
According to reporting on the BBC today, Sarah Breeden the banks head of financial stability has warned that share prices may not be fully reflecting the risks currently facing the global economy — including geopolitical instability, higher inflation, rising borrowing costs and stretched valuations in areas such as technology stocks.
For investors, this is an important warning that often the more complex the investment the more risk you unwittingly take on.
Why Property Feels Different
Property is not risk-free, but it is underpinned by something tangible: people need somewhere to live.
Unlike shares, residential property is a real asset with practical use, rental demand and long-term scarcity behind it. Good-quality homes in strong locations are not dependent on market sentiment alone — they are supported by real-world demand.
That is why most of the worlds richest people prefer property and land as a long-term wealth-building strategy.
The Magic of Property
One of the biggest attractions of property is the ability to gear with the banks money. You borrow at 75% LTV and for every 1% the property goes up in value you make 4%. That way a modest increase of 5% actually makes you a 20% return.
You also have income coming in each month from the rent, meaning your tenant is paying off your mortgage.
Inflation also eats away at your debt slowing reducing it, all as rents continue to rise due to our chronic shortage of suitable family homes.
If you would like a chat about how we could help you with your property investment goals then please contact is today, we would love to hear from you.
