The Age Old Debate...

- Mon 23 Jun 2014

No, this blog is not about football, or men versus woman, this age old debate is the investment one – should you invest in shares, property, gilts or cash? Most of us in the property profession, especially the over 50s, have seen the ups and downs of the property market, but overall, we have enjoyed the benefits of purchasing property. Few people want a market as it is in the South East and London at the moment, a market destabilised by overseas buyers continuing to search for a safe haven for their money. However, a steady market, as it is in the South West, seems sustainable and sensible for everyone.

But returning to the question of investment, if you suddenly won £100,000 on the lottery, where would you look to invest that money - property, equities, gilts or cash? The pros and cons of UK property are well known. The advantages of investment in property are that, over time, security of income and capital appreciation have historically provided the best returns – as we will see later. In addition it is a tangible asset that most of us feel we can identify with (and decorate occasionally). However, it can be seen as illiquid, reliant on tenants and intensive to manage.

Stocks and shares, on the other hand are seen as very liquid, easy to invest in (you are not relying on our friends at the bank or surveyors), however, they are volatile and many people see the asset as remote as well as higher risk.

On the contrary, gilts issued by a government are usually a fixed interest investment and are rated lower risk and, as such, the income paid usually reflects this.

Finally, our friend cash. It is very tangible, stable, liquid and divisible, but there is no capital return on cash and, as such, it becomes negligible as an investment.

Given the above, hugely, abbreviated look at some asset classes, the table below shows how property has outperformed the other asset classes over a period of time, with residential coming top of the class.

 

There are, of course, many other types of investments and also hybrids of the above, but the above graph shows residential property has been consistently strong over the years – and the present market would look to reflect this view.

At Bradleys we have a wealth of different kinds of property investments to suit all purses. If you would like to discuss property investments further with us, or join our Investment Club, which has over 2000 members now and notifies them of new investment properties to the market, why not call our Commercial and Investment Department on 01392 432346 for a confidential chat. We would be pleased to hear from you.

Jonathan McKinnel - Head of Commercial and Investment Property

Jonathan McKinnel
Head of Commercial and Investment Property