10 Reasons Why Now is the Perfect Time to Invest in Property
The richest people in the world often either made their money from property or invest heavily in it. Their success gives us clues, and it’s clear: property investment is one of the safest ways to grow wealth. Here, I’ll share 10 reasons why now is the perfect time to invest in property and why it’s still a stable and profitable option.
1. Population Growth
The UK’s population has grown by over 6 million people in the last decade and now stands at over 67 million. With limited land on our small island, the demand for housing is rising faster than we can build new homes. In the next 20 years, UK households are expected to grow by 250,000 each year. This means there aren’t enough homes, which pushes up rental prices and property values, making property investment very attractive.
2. Generation Rent
We’re in the time of Generation Rent. More people are choosing to rent instead of buy, either because they can’t afford to buy or because they like the freedom renting offers. The average age of first-time buyers in the UK is now in the mid-30s, and in cities like London, it’s even in the mid-50s. Younger people want flexibility and often can't afford to buy, which keeps rental demand high—making buy-to-let properties a great investment.
3. Leverage
Property allows you to leverage your money more than most investments. If you put £100,000 in stocks, you get £100,000 worth of shares. But if you invest £100,000 in property, you can often buy £400,000 worth of property using mortgages. This leverage can double the return on your investment compared to stocks, making property a powerful way to grow your money.
4. Instant Equity
You can create instant equity when buying property below market value. For example, if you buy a £100,000 home for £80,000, you’ve instantly gained £20,000 in equity. No other investment lets you create value like this from day one. You can also add value through renovations, which can increase the property’s worth even more.
5. Timing
Many people say they are waiting for the “right time” to buy property, whether because of political uncertainty or fear of a market downturn. But professional investors know there is never a perfect time—only the right strategy. Buy properties that cashflow well and add value to them. Trying to time the market is difficult, but buying smart is always profitable.
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6. Section 24 Tax Changes
The Section 24 tax changes made many landlords sell their properties because they can no longer claim mortgage payments as a tax-deductible expense if they bought the property in their personal name. This has opened up opportunities to buy these properties at a discount, especially through creative strategies like lease options or buying through limited companies. It's a perfect time for smart investors to get good deals.
7. Economic Uncertainty
Uncertainty around the Labour party's 2024 Autumn budget and other economic issues has made many people hesitate, which means there is less competition for those who are willing to invest. As Warren Buffett says, “Be fearful when others are greedy, and greedy when others are fearful.” Right now, this climate offers opportunities to buy properties at lower prices.
8. Pension Shortfalls
Most pensions aren’t enough for a comfortable retirement. By investing in even one buy-to-let property, you could fill in the gap left by a small pension. Imagine if you owned ten properties. You can also use a SSAS (Small Self-Administered Scheme) pension to invest in property and grow your retirement pot while saving on taxes.
9. Property vs. Cash in the Bank
Leaving cash in the bank earns you around 1%, while a basic buy-to-let property can give you 7% or more each year. Inflation also reduces the value of your money over time if it’s just sitting in the bank. Property not only protects your money from losing value but also helps it grow through rental income and property value increases.
10. Political and Economic Stability
Despite things like Brexit, the UK is still one of the most politically and economically stable countries in the world. Unlike investing in unstable areas, property in the UK offers a predictable and safe environment. This stability gives you the freedom to build wealth without worrying about major disruptions.
In Summary
Investing in property is still a safe and rewarding way to grow your wealth, especially today. From growing demand due to population increases to tax changes creating new opportunities, there are many reasons why now is the time to start investing in property. Don’t wait for the “perfect time”—take action today and start building wealth for your future.
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