In July this year, the Bank of England announced the first interest rate rise in 10 years, from the dismal 0.25% brought on by economic uncertainty in the wake of the Brexit vote. While this is good news for many in the UK, it will definitely raise questions for those who invest in properties around the UK and its dependencies.
One of the best ways to keep your investments going since the 2008 Financial Crisis in the UK has been government bonds, or gilts. A very low-risk investment when interest rates are low, the rise, however small, will likely make government gilts less enticing as some investors will find that they’re actually losing money after taking all the factors into consideration.
As a result, many investors will sell their bonds en masse, which will cause the yield of the bonds to go up, making it a perfect opportunity to purchase bonds. It’s a less than ideal time for established investors but just right for newcomers. Having a strategic bond fund is a great safety net in times like these, as experts like Artemis Strategic Bond can point to a 17pc return over three years with their methods.
Another option to shore up your investments is looking outward, to foreign property investments. If you have the knowledge of foreign laws regarding property investments in areas like Portugal, Latin America and tourist hotspots like Cape Verde and The Bahamas can provide some certainty and stability when the UK isn’t providing it.
If you’re looking to enter the property investment market, now is a good time to spread the roots, before the bond market stabilises again and locks newcomers out. As for established players in the market, growing your overseas investments, or choosing a strategic bond fund can keep the boat from rocking too hard.
Knightsbridge Ventures are a new property investment company bringing fresh new investors into Europe and overseas.