The UK is headed towards massive inflation, and all the signs are there. In the last 12 months, until January 2022, the Consumer Price Index has risen by 5.5 per cent. As per the National Statistic series, this is the highest inflation growth pace since 1992. Another statistic that is an important measure of inflation in the UK is the Retail Price Index, which is also expected to rise by 5 per cent in 2022. According to estate agents in Walderslade, here are seven different ways to leverage the UK real estate market during inflation.
1. Diversify your portfolio
The best way for property investors, homeowners and landlords to mitigate their risks while ensuring a high return on investment is by diversifying their portfolio. By having a diverse portfolio that includes residential properties, commercial properties as well as mixed-use properties, investors will be able to reduce their risk all while ensuring a hefty profit in the long run.
2. Put your money wisely
While investing in real estate and land is one of the best ways to beat the rising inflation, it is very important for investors and high net individuals to invest wisely. That means understanding the market, researching the market trends and making sensible investments that will have a high return on investment, in the short term and long term.
3. Invest in buy to let properties
One of the best ways to make the most of the rising inflation is by investing in buy to let properties. As the rate of inflation continues to rise, so does the cost of living. In that case, the monthly rental will continue to increase at a similar pace, which in turn will be beneficial for landlords and property investors. Investing in buy to let properties has one major advantage; the monthly rental can be used to pay off any existing mortgages.
4. Long term investing is the way to go
In order to really leverage the real estate market during inflation, estate agents and property investors need to invest in properties for the long term. As we have seen in the previous year, during the Covid-era, the average price of property increased by 10 per cent from November 2020 to November 2021. The longer the investment period, the higher the return on investment.
5. Have low correlation investments
Simply put, your investments should have a low correlation to each other. That way, if one industry or one sector fairs badly during inflation, your other investments will most likely fair well. Basically, do not put all your eggs in one basket!
6. Invest in upcoming locations
Invest in upcoming areas in order to secure a decent return on your investment. For instance, Leeds, Manchester and Birmingham are considered some of the best investment areas in the UK in 2022 – if you are thinking about investing in property, these are the areas to focus on.
7. Consider commercial real estate investments
Even during the peak of Covid in 2022, commercial real estate investments were some of the few investments that remained safe from the dynamic market trends. Also, the commercial real estate sector was quick to get on the path of recovery; thus, commercial real estate investments are considered safe investments.