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Why Invest In Spanish Property
There is widespread press speculation about the different types of investments on offer in the UK. The sectors and companies that were previously considered to be safe have proved to be a disappointment. The levels of growth experienced in the past are no longer there. Many people are worrying about their retirement: people are living longer but pensions are rapidly shrinking as the funds behind them underperform.
Pensions have become the decade's 'dirty word'. Many companies are closing their final earnings schemes because they simply cannot afford to put in the necessary funds. This is reflected in the private sector where to retire on a modest pension of say £24,000 per year you need to build a fund of £600,000. If you are 15 years from retirement you would need to invest around £2,400 a month from now until retirement. If you had started investing 15 years before, your investment would have been around £850 per month (assumes growth at 4%).
UK Buy to Let
In the past this was the simple answer for that solid investment that will provide returns both now and into the future. This has become hugely popular in the UK over the last few years. The problems arise when you look at the effects of the popularity of UK buy to let.
There is a glut of rental property driving down rents – the average rental return is now 4.8% - in many cases lower than the mortgage before considering any costs. However, the capital growth in some areas is still strong. Many experts believe the market is overheating and that an adjustment in UK property prices is on its way. The Bank of England wants to curb house inflation through increased interest rates. Many people are still buying in to the market despite this published aim. It takes a brave investor to bet against the Bank of England not achieving this goal.
So, what alternatives are there??
Alternative Investment
Property is still a firm favourite of many investors but the UK market in general terms no longer has the right factors in place to be profitable. Many overseas markets do have the right economic factors to make investing profitable. Capital growth in many regions matches or exceeds the huge growth that the UK market has experienced. On average, returns of 10.5% are being achieved. If you are thinking about Overseas Property you would not be alone - according to the DTI, over 600,000 people have invested in properties abroad. A recent survey said that over 70% of 'ABC1s' are considering investing overseas.
