Safe as houses: Property investing weathers the storm
Property investing has outperformed most asset classes in recent years despite global economic uncertainty, new research has found.
Analysis from peer-to-peer property investment platform easyMoney noted that the average UK house price rose from £258,430 in 2021 to £284,407 in 2022 – a 10.1 per cent increase.
Even in London, where the market failed to match the nation’s wider success during the pandemic, average prices increased by 5.9 per cent to hit a high of £530,807, said easyMoney, citing data from the UK House Price Index.
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The platform found that the only other asset class to produce higher returns than property over this period was dividend pay-outs.
“Dividend aristocrats such as Coca-Cola and RELX increased by 15.2 per cent and 13.3 per cent respectively,” the research said, citing data from MIE and Fool.com. “However, such investments are often more difficult to access for the amateur investor, reserved mainly for professionals with massive amounts of money to play with.”
The research found that precious metals have not fared as well as property in recent years. From 2021 to 2022, the value of silver fell by 13.3 per cent, according to Investing.com, while the value of platinum fell by 12.1 per cent and palladium declined by 11.8 per cent. Gold saw just 0.3 per cent growth in value over the period.
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Looking at the stock market, America’s S&P 500 declined in value by an average of 4.7 per cent, while London’s FTSE 100 fared saw an increase of 5.9 per cent, with the report citing Investing.com data.
“Property is a reliable investment class and resilient in the face of wider economic struggles, as has been proven since the start of the pandemic and throughout the current financial situation we find ourselves in,” said Jason Ferrando, chief executive of easyMoney.
“People expected house prices to plummet in early 2023 and that simply hasn’t happened.
“But, for amateur investors, it’s not just a question of great returns, it’s also about accessibility. For someone who doesn’t have in-depth knowledge of the stock market and its internal workings, for example, taking advantage of stocks and shares can be daunting and unnecessarily risky.
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“Meanwhile, accessibility to the property market once required investors to have enough money to afford at least a mortgage but now, thanks to P2P investment platforms, this barrier has been removed.
“P2P property investment platforms enable investors to get involved with property investment for much smaller amounts of starting capital by contributing their investment towards a larger pot which is then used to develop property.”