Where should you invest in 2022? Inflation and interest rates are on the up, but the majority of people still see bricks and mortar as the best investment avenue.
If the past two years has taught us anything, it is that nothing is certain. However, some things don’t change, and property’s position as a “safe haven” asset class for investment is one of them.
A new survey by Finder shows how people in the UK still see the most value and potential in the country’s housing market. A total of 29.6% of people said they believe property will be the best performing investment in 2022, accounting for the highest proportion of respondents.
The UK property market has seen consistent house price rises alongside a strong appetite from buyers in recent years. Latest ONS data shows prices increased by an average of 10.7% between December 2020 and December 2021, bringing them to an average of £293,339.
Investment picture across the world
While many believe that transaction levels will taper off and the demand-supply imbalance will begin to even out, most forecasts still predict a steady incline in the coming years. This means, for buyers and investors, if you make the right investment, capital appreciation is highly likely.
However, the UK is somewhat unique in the strength of its property market, which is why it has historically attracted so much foreign investment. Finder’s survey shows that other countries favoured different options for their funds in 2022.
In the US, for example, cash was the winner with 34% saying it would be the best performing investment. Property attracted just 21% of the vote.
Hong Kong property is a sound investment choice for just 14% of respondents, with the majority (22%) also opting for cash as the best option. Investment into UK property from Hong Kong has been strong for a number of years.
Interestingly, the UK results were split by age range in Finder’s survey. This showed that older investors are much more likely to favour property, with the highest percentage (36%) of over-65s choosing this option. This was followed by 35% of 45-54-year-olds, and 32% of 55-64-year-olds.
Perhaps unsurprisingly, the youngest age group – 18-24-year-olds – had the lowest proportion planning to back property in 2022, with 23%. As prices continue to rise, ownership is out of reach to many young people, which is why the country’s rental market is performing so strongly.
Those in the youngest age bracket were far more likely to invest in cryptocurrency (22%) than any other age group, and this age range also favoured cash (26%) as having the most potential.
Not being deterred
While stocks and shares are still a popular option, they can be a much more volatile asset class by comparison. In the UK as a whole, stocks and shares were chosen by 17% of people, behind cash at 24%.
“The Bank has hinted that further interest rate hikes are on the horizon which could see an end to the house price boom we’ve witnessed over the past two years.
“If you’re considering purchasing property this year it’s important to factor in possible rate hikes as this could make mortgage repayments more expensive, particularly if you’re on a variable home loan rate.
“Only time will tell if this eventuates, but it’s important to plan ahead for all possible scenarios especially as the market remains pretty uncertain.”
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