Cashing in on bricks and mortar: Why property is still the nation’s favourite wealth-builder
Photo by Alex P
In a world where avocado toast is rumoured to be the true barrier to home ownership (hint: it isn’t), one question continues to pop up faster than a rogue estate agent at your front door: “Is property investment still a good way to grow wealth?” Well, dear readers, it’s time to brew yourself a nice cuppa and get ready for the most thrilling (yes, we can make property thrilling) exploration of bricks, mortar, and money you’ve read all year. Buckle up—this is the news report on property investment you never knew you needed.
The property market rollercoaster
Word on the street (and by street, we mean all those sensational headlines) is that the property market has been on a bit of a rollercoaster ride. One moment, we hear it’s on fire—homes selling within days, multiple offers, bidding wars that make the Hundred Years’ War look quaint. The next, we’re told a housing slump is imminent, and folks should batten down the hatches, invest in tins of baked beans, and prepare for a total market meltdown.
The truth, however, is often somewhere in the middle. Property has its ups and downs, but over the long haul, it’s historically shown itself to be a relatively stable vehicle for growing one’s net worth. Put another way, if you’d like to avoid stuffing your hard-earned savings under the mattress (where it definitely won’t earn interest—unless you have very generous dust mites), investing in property remains an appealing option. As any wise homeowner might say, “They’re not making any more land!” unless, of course, Elon Musk colonises Mars—but that’s a story for another day.
Why property, why now?
With inflation hovering like an unwelcome relative, interest rates bobbing about, and the cost of living making us all practice deep breathing exercises, is now really the time to dive into the property pool? You might be tempted to hold off until the “perfect moment”—usually the day after you win the lottery or discover you’re the long-lost heir to a fancy estate. However, seasoned investors tend to say that attempting to “time the market” is about as easy as herding cats.
Despite the occasional doom-and-gloom scenario painted by experts and journalists (we prefer to paint in pastel shades, personally), people continue to need places to live, work, and occasionally have a barbecue in the garden. Landlords continue to collect rent. Over time, property values still, on average, trend upwards—albeit with the odd bump along the way.
Headlines vs. reality
Speaking of doom and gloom: it’s important to note that headlines love extremes. “Housing Market Collapses—First-Time Buyers Flee!” is more eye-catching than “Normal Fluctuations in a Reasonably Steady Market.” But let’s not kid ourselves: sensational stories about housing do reel us in. The property sector, like the fashion industry or the world of celebrity gossip, thrives on drama. While it might make for excellent water-cooler chat, it can also obscure the more balanced reality: property values might dip in one region while soaring in another. A particular type of property might become trendy (hello, tiny homes!) while another fades in appeal. So, taking the time to do your own research is crucial—no matter how certain a headline sounds.
Diversifying your portfolio
When most people hear the phrase “investment portfolio,” they imagine a stuffy banker in pinstripes. But in reality, your financial portfolio can be as varied as your spice rack—and property can play a starring role. Property is considered a tangible asset—something you can physically touch, walk around in, and occasionally host a birthday party inside. It stands in contrast to stocks and shares, which are more like intangible numbers on a screen that can fluctuate wildly in value if someone sneezes in the wrong direction.
Adding property to your mix can diversify your risk. Put another way, if the stock market decides to swan-dive next Tuesday, your property’s value typically won’t be inextricably tied to that event. Mind you, property prices can indeed move in response to broader economic factors, but generally, it’s a slower, steadier shift than the heart-attack-inducing daily swings you might see on the stock exchange.
That gleaming golden egg: Rental income
One of the major selling points of property investment—beyond the potential for capital growth—is the opportunity to collect rental income. This can help cover your mortgage, pay for maintenance, or fund your next extravagant dinner featuring Wagyu beef (assuming your tastes run that way). The UK’s rental market has been buoyant for years, driven by factors such as rising house prices, population growth, and a workforce that’s increasingly mobile.
Of course, being a landlord isn’t exactly a walk in the park. It’s more of a walk in a park where you occasionally get chased by an angry goose. You’ll need to handle maintenance calls at inconvenient times, chase late payments, and possibly mediate disputes over whether pets are allowed. But if you’re prepared to put in the effort (or hire a property manager, if you’re feeling fancy), the rental income can become a reliable source of extra cash—and maybe even a springboard for your next investment.
Serviced accommodation mortgage: The next frontier
In other news, there’s been a rising trend in investing in holiday lets or serviced accommodations. Think properties that people rent out for short stays, like your own personal Airbnb empire—minus the creative soap sculptures. With travel increasingly returning to normal, short-term rentals have seen a bit of a boom in certain tourist-friendly areas.
Enter the serviced accommodation mortgage. That’s right—a financing option designed specifically for properties let on a short-term basis. While it might sound as niche as a mortgage for octopus enthusiasts, it’s actually becoming quite popular. The gist is that if you’re looking to buy a property specifically to rent out on platforms like Airbnb or Booking.com, you’ll need a particular type of mortgage that allows for (and usually requires) those short-term lets. It’s not for everyone, but if you’re keen to capitalise on holidaymakers or business travellers seeking a homier alternative to hotels, it’s an avenue worth exploring.
The power of leverage
Another factor that makes property stand out is leverage. We’re not talking about blackmail, folks—we mean using other people’s money to increase your own potential returns. In the property world, that usually takes the form of a mortgage. By putting down a deposit and borrowing the rest, you can buy a more expensive property than if you were reliant solely on your own savings. If all goes well and the property’s value rises, the gains you make on your deposit can be significantly higher than other forms of investment.
Of course, leverage can also work against you. If the market dips and you’re over-extended on your loans, you could find yourself in a pickle. Think of leverage like a powerful car—fantastic when you’re in control, but potentially disastrous if you forget where the brake pedal is. So, do your homework, talk to mortgage advisers, and make sure you understand the full implications of taking on debt.
The everlasting allure of owning something real
Why do people continue to gravitate to property, even in times of uncertainty? Part of it might be our national obsession with home ownership. Perhaps it’s the reassuring feeling of “at least I can live in it if everything else goes to pot.” Or maybe it’s just fun to brag to your friends about your new buy-to-let in Cornwall (while secretly praying you find decent tenants).
At the end of the day, property is a tangible asset—one you can see, touch, and even improve. That’s an attractive proposition in a world increasingly dominated by digital products that can vanish at the click of a mouse. While property values certainly aren’t immune to market forces, bricks and mortar often inspire more confidence than intangible assets precisely because they can’t be deleted, stolen by hackers, or replaced by a random software update.