As a tumultuous couple of years draw to a close, many investors are evaluating their assets and thinking about how the UK property market will perform in 2022, and beyond. UK house prices have risen consistently throughout 2021, and forecasts suggest this is likely to continue next year – but for how long? If you’re considering diversification via property investments, now may just be the perfect time.
Why diversify your investment portfolio?
Diversification refers to investing in a range of assets that differ in sector or region. This provides you with some protection in the event of an investment failure, or an unexpected value drop in a certain area. If all your investments are similar or linked in some way, all your investments will be negatively affected should this happen. Diversification helps to minimize the personal financial impact of such events, in a nutshell.
While portfolio diversification has always been an important risk-mitigation strategy, the events of the last few years have made it even more essential for UK investors. Brexit began a period of widespread economic uncertainty, which was then intensified by the devastating impact of COVID-19. In such unstable financial times, it has never been a better idea to keep your eggs in separate baskets.
Why invest in UK property now?
Portfolio diversification is the goal but is property investment the best way forward? According to many investment experts, the answer could well be “yes”.
Property prices have climbed steadily since the housing market reopened, with demand from buyers reaching an all-time high, and supply, an unprecedented low. According to Savills, the first six months of 2021 saw an average house price increase of 5.6%. Despite much of this growth being attributable to the stamp duty cuts which ended in March, property prices are still on track to hit a total increase of 9% by the end of December. To put these figures in context, the total value of UK property transactions in 2021 is set to surpass £1.6 million, which is approximately 35% higher than the average from 2015 to 2020. Needless to say that so far, it has been a great year for property investors.
As mentioned above, the good news is that for the short term, at least, this trend appears set to continue into 2022. However, all signs do point to 2022 having a greatly reduced capacity for growth, all factors considered.
With a slowing down of price growth on the horizon, now is arguably the best time to seek out new property investment opportunities. Though all investments are risky, the gradual plateau in growth we are likely to experience over the next 12 months means that new investors, of late 2021 and early 2022, can take advantage of this potentially-lucrative market with relative confidence.
YOUR CAPITAL IS AT RISK IF YOU INVEST
Investment opportunities available via Acorn Property Invest are exclusively targeted at exempt investors who are experienced, knowledgeable and sophisticated enough to sufficiently understand the risks involved, and who are able to make their own decisions about suitability of those investment opportunities. All investors should seek an independent professional investment and tax advice before deciding to invest. Any historic performance of investment opportunities is NOT a guide or guarantee for future performance and any projections of future performance are not guaranteed. All investment opportunities available via Acorn Property Invest are NOT regulated by the Financial Conduct Authority (FCA) and you will NOT have access to Financial Services Compensation Scheme (FSCS) and may not have access to the Financial Ombudsman Service (FOS).