Savings or property?

[totallyproperty]

Many senior citizens in the UK, and across Europe, are sitting on significant savings which are attracting minimal interest at this moment in time. As a consequence more and more are looking towards the property market, with particular interest in the buy to let sector, as a means of increasing their income and offering potential capital growth in the longer term.

On paper this seems perfectly reasonable but there are a number of factors to take into consideration such as potential capital losses, the cost of letting properties as well as the investment timescale for those in their later years. The Bank of England has suggested that UK base rate could be back to 3% within the next three or four years prompting the question, would a rush to long-term property investments to increase short-term income be worth the risk?

 

[ArthurOnline]

Property all the way! If you look after your property effectively, your investment will be safe and may even give you a profit in the end.

 

[Angela Gray]

From what I've read over the past few weeks, I think a return to savings interest rates of the level you mention is still a long shot. I'd always opt for property as a means of getting the maximum return on any lump sum, with the only exception being if you anticipate needing to liquidate this capital for essential living expenses within the next 5 - 10 years.

 

[Ed_P]

Property is a great investment because you can see exactly where your money is, but the property market does fluctuate and crises do happen!

That being said, by renting out a property you can make a lot of money every month, this sort of stability is not easily available in other investments, not with the same security anyway.

Ed

 

[KGeeson]

I think it's a case of not putting all your eggs in one basket. Property is still one of the most secure investments you can make (more so than stocks and shares),as you have security against a physical asset. Research and rigorous Due Diligence are the key to making your investment as secure as possible.

With the recent changes in UK pension laws, allowing people to pull 25% off their pension out early (tax free) I'm sure we will continue to see a rise in the amount of people investing in property for their future instead of standard pensions.

My father has invested in several pension schemes for many years, but now at retirement stage he is wanting to do buy, refurb and sell projects to create a larger income. This is definitely my strategy for the future too.

 

[Cowell]

Property as an investment will always be a good idea for one sound reason: People will always need a place to live. Having a diverse range of property by way of value is always a good idea as well.

 

[PropEx]

I see your obvious logic in "people will always need a place to live" but not sure if it is as simple as that though. The west will always drink bottled water now, should I invest in bottled water because people will always need to drink water? (I am using not a great example, to be fair!)