Inflation-proof your finances
In February of this year the Consumer Price Index was 2.3% higher than in the same month in 2016. That’s quite a jump compared to the 1.8% increase in January. With interest rates at a historic low of 0.25% many are seeing their savings eroded at an increasing rate.
Figure 1 – Annual Percentage Rise in the UK Consumer Price Index
Source: Office for National Statistics
The Monetary Policy Committee’s last vote was split at 8-1 with minutes of the meeting indicating there was debate over rising inflation but the result was far off the required majority of five to secure a rise in interest rates.
Much of the discussion concerned the impact of rising oil prices and fall in value of the pound. It’s likely that Brexit and a potential increase in import costs might further exacerbate this trend.
Many regard the Bank of England’s inflation forecasts too complacent and some financial analysts have forecast inflation of up to 4% this year. Despite the spectre of inflation, a rate rise is unlikely this year with many analysts expecting rates to rise in 2018 at the earliest.
Inflation beating savings
So what does this mean for savers? At Holiday Crowd we provide investors with a product that performs well in an inflationary environment. At a time where the Buy-to-Let market is suffering and rents are stagnant or declining in many areas, the holiday property market remains resilient.
An investment with Holiday Crowd provides you with a share in a property that offers the following:
- A share of any potential increase in value of the property over time
- A target dividend well above current interest rates and inflation
- A dividend based on rental income that increases above inflation
We have worked with our exclusive partner, Sykes Cottages to analyse booking data for the first 80 days of 2017, showing an increase in prices of 4.9% on the same period in 2016. This provides a strong backdrop for our investors and further outlines the resilience of the holiday property market.