Off-plan property investment is the process of investing in a property while it’s still in construction or in the planning stage and, in a world where everything is currently uncertain, many investors are now turning to it to try and protect their wealth.
With the stock market, crypto and other classic investment routes currently experiencing huge uncertainty and price drops, finding a stable and secure place for your investments isn’t easy.
From the current war in Ukraine, Brexit troubles, the cost of living crisis and the fuel crisis - a number of things have conspired to come together to make conditions especially choppy, and that’s before we even touch upon the post-pandemic investment world.
With this in mind it’s important to find a relatively stable and secure market that still has the potential to grow over time - off-plan property fits the bill, so we thought we would put together our top 3 reasons why off-plan property investment is a great choice.
As it stands, UK property prices are outperforming the current rate of inflation, 6%, and off-plan properties benefit from a lower entry level than that of completed stock, in turn offering a higher capital gains potential.
Inflation, it must be considered, is conspiring to make your assets worth less. If the average cost of everything increases by 6% that means that in realistic terms £1 is worth 6p less than it was a year ago in terms of what it can buy, thanks to increasing prices.
In the current climate, even finding an asset or investment that is increasing in value rather than decreasing or standing still, is an achievement in itself.
It’s an understandable reaction in uncertain times that investors would look to sell or move out of riskier investment markets, however, it’s something you need to be aware of.
A huge perk of buy-to-let property investment is that it provides a passive income, and off-plan properties are often highly sought after amongst tenants thanks to the brand-new facilities they feature. In comparison, if you were to invest that same money into stocks and shares, you’d need to have invested in stocks that provide dividend payments for something that even compares to this level of income.
This is measured in yields, so if you were to invest £100,000 in a property with a 7% yield, for example, that means it provides you with a £7,000 per year income upon completion. For an asset that also increases in value at a rough rate of 10% per year currently, that’s a really attractive feature.
Most importantly, perhaps, the market conditions around home ownership and demand for rental property are set to remain very favourable for investors for decades to come.
There is little expectation that government will significantly increase the rate of either house building or social house building. Similarly, despite the relative success of Help To Buy, for example, there isn’t likely to be any significant increase in younger people becoming homeowners.
With all of that in mind, the conditions for the above are likely to remain good or even improve in the long term.
That all comes together to suggest that now is an excellent time to consider investing into the property market in the UK.