This is a question I’ve been thinking about a lot recently, especially since working directly with my own clients.

At least once a week I have a conversation with a client who wants to buy a second property because its a ‘safe and secure asset’ and ‘the value will definitely go up’ or the popular phrase is ‘property is my pension’.

It’s interesting to listen to the different view points. In my role as an Independent Financial Adviser, I have knowledge about the alternatives, such as tax efficient investing, but they don’t teach us these things at school (…don’t get me started!). Property is a natural ‘go to’ as it’s relatively easy to understand.

The British are obsessed with bricks and mortar and more of us own our own home than most countries. Property is an asset we can see and touch, and an obvious asset to display wealth.

On the opposite side, people can feel nervous about investing into stocks and shares, the thought of money ‘going up and going down’ particularly during volatile times, witnessed during the Covid-19 outbreak. This again reverts back to education and understanding that investing is not all about putting money on ‘red or black’ or the latest cryptocurrency.

What if we had our property valued every day? How would this make us feel to see the valuation fluctuate? I have been keen to understand this and recently looked at historic property prices over the past 30 years:

This thought process is not to say what’s the wrong or right decision to make, property does work in the right situation and offers diversification.

I think its important to understand what drives desire to buy property and more importantly, ask ‘why?’.

When choosing a Financial Adviser its important to work with someone you trust, who is prepared to provide the education and take time to demonstrate the pros and cons of what is right for the individual circumstances, without bias.

What next?

If you have any questions regarding this article, please contact Charlotte Elgar.