British Pearl

Is direct property investment for you?

Oct 18 • The British Pearl Team

The average homeowner in Britain aged 65 or over owns property that has soared in value by £159,000 over the past 23 years, amounting to a gain of £7,000 per year. The overall increase in property wealth in London is over double that, at £14,257 annually. This property wealth could enable pensioners to generate returns which could contribute to their quality of life as well as the lives of their children, through rental income, equity release, downsizing…etc. Property has its benefits and drawbacks for use in later life.

Benefits

- Property investment has, over time, been resistant to inflation. Yields (a year's rental income as a percentage of how much the property cost) remain robust versus inflation plus there is potential for capital gains. This income cushion could remove some of the stress associated with property investment.

- Property is simple and straightforward compared to financial markets and instruments with complex terminology. You know that your investment is in something solid: bricks and mortar.

- Investing in property over some other intangible asset classes gives you control. You choose the location, how you buy and how you make your money: through tenants, refurbishment...etc. Remember that a fall in price does not translate to a loss until the property is sold. You can hold the investment, still generating an income through rent, until the price recovers.

Drawbacks

- Traditional real estate requires a huge sum of money to be able to get started. A deposit for a first-time buyer in London is expected to reach £250,000 within the next ten years.

- Building a diversified portfolio is now less attractive and more expensive due to the 3% higher rate of stamp duty on second homes.

- Personally managing rental property can be time consuming, expensive and stressful - especially if your tenants are unreliable.

- Property as an asset class is relatively illiquid, meaning it could take a while to sell and your ability to be able to access your investment funds quickly and efficiently is considerably constrained.

- Knowledge and experience are required to differentiate between a good investment from a bad one.

British Pearl has the solution

- Invest anything upwards from £100 using our simple, flexible platform.

- Spread your investment across several properties which vary in sector, location, risk, and more. There are multiple choices for how you can invest through British Pearl, including an ISA. You can oversee your property investment portfolio in one location; diversification made easy.

- We handle all of the management, taking away the hassle. Our Property Team has key connections to source high quality property investments.

- Our Resale Market will allow people to list their shares and loans in order to sell them to other investors. It is important to note that we cannot guarantee that someone will be able to sell (exit) when they want or at the price they want and liquidity is dependent upon matching with a willing buyer. However, you now have the opportunity to exit so need not feel trapped inside a completely illiquid investment.

- We have dedicated teams in property, finance, law, technology and more to make sure your investment is in capable hands. Each property is assessed in detail so you can be making an expert decision without needing to understand all the complex jargon.

With British Pearl, you can spend as much or as little as you want and cherry-pick your own investments, without the stress of being a landlord. We aim to be a property investment company centred around its investors, so you can enjoy the benefits of property investing without the headache.

Sources:

  1. Mortgage Strategy / Over 65s in London earn 14,000 plus from homes

  2. What Investment / Why is property investment best for your retirement?

  3. Your Investment / Why property really is the best investment

  4. Business Insider UK / Average London home deposit set to hit nearly 250,000 by 2027