Where to invest your money during inflation in the uk
Recent research indicates that cautious savers are stashing more cash than ever before. However, these sums are rapidly eroding with record-low interest rates due to inflation.
So, where could you invest your money more effectively?
The newest data indicates that people in the United Kingdom have more cash savings than ever. As a result of reduced expenditure due to the coronavirus lockdown, savings accounts have accumulated £77 billion in the first half of 2020, compared to £82 billion in 2016. These are the results of Janus Henderson Investment Trusts, which also revealed that the average British household is missing out on around £1,350 in growth by keeping this amount in low-interest cash.
According to Creditfix.co.uk, the average (mean) savings per adult have increased from £273 per month before the credit crunch to £495 per month. In addition, the Yorkshire Building Society reports that 30 percent of consumers now save £200 or more each month, up from 21 percent in 2019, and that one-quarter of individuals are growing their savings.
According to James de Sausmarez, director of Janus Henderson, this cash hoarding could not have occurred at a more inconvenient time. The current average interest rate on cash accounts is 0.39 percent, while the top regular savings accounts provide a maximum of 2.75 percent. Moreover, it is predicted that the interest rates will remain low for a very long time. Thus there is no light at the end of the tunnel for cash. Banks refer to this as “muppet money” since they recognise that savers are missing out on far superior prospects elsewhere.
During rising inflation, investing in real estate might be a wiser choice, primarily when investing with a long-term perspective. Real estate is one of the most lucrative investments.
In addition, the real estate market has shown remarkable resilience in the face of recent political and economic instability. The persistent housing scarcity in the United Kingdom makes property investing an attractive option for investors.
This imbalance between supply and demand suggests that landlords who invest in the correct places may see significant demand from renters and a rise in property value over time.
Compared to alternative investment options, most savings accounts continue offering ordinary interest rates. With the current economic instability, the stock market is also exceedingly volatile. If you make the wrong judgement, you may be far worse off than if you had invested in rising equities.
This further demonstrates why real estate might be a wiser investment option during periods of high inflation. With inflation anticipated to stay high for some time, it may be a good moment to invest in UK real estate.
Some beneficial UK property investment strategies include:
Rent to Serviced Accommodation:
Serviced accommodation is one of the property rental market’s fastest-growing divisions, bringing substantial benefits to tenants and landlords.
Serviced housing, which falls between a regular vacation rental and a hotel, is becoming increasingly popular with tourists, business travellers, and those interested in more extended stays.
Increasingly, landlords and property owners are turning to serviced accommodation to maximise the revenue on their rental properties.
Serviced accommodations give additional flexibility by making the property available for short-term and long-term stays.
Buy-to-Let Property is an investment where the investor purchases a residential property to let out and earn rental income. A buy-to-let property is a residential investment that generates rental income and grows in value over time.
An investor purchases a home either off-plan or at a resale price and earns extra income by renting it out, with the long-term intention of benefitting from the sale of the property. Many individuals in the United Kingdom view real estate as a solid, medium- to long-term, low-risk investment that has become a very successful source of income.
Typically, investors who purchase buy-to-let properties fall into one of two categories: those with a portfolio of properties who rely exclusively on rent from tenants or those seeking supplemental income through the rental of one or two homes.
In the current economic context, real estate investing is viewed as a more attractive investment opportunity than low-interest savings accounts or the volatile stock market.
As professional letting agents, it is Star Sterling’s responsibility to assist you in establishing or expanding a portfolio of investment properties.
Please contact us if you want to learn more about how to maximise your profits in the current market conditions.