As for house prices, London remains depressed. During the pandemic we saw a shift out of cities, and to some degree this is still the case – and probably will be for some time yet. Prices for country properties with land attached are good. Thankfully, schemes to help young people get on the property ladder have been protected and low interest rates have helped them get mortgages. Plus, with more savings, people have been able to stump up for fees and stamp duty.
But remember house prices tend to rise over the long term. That’s often irrespective of what else is going on in the economy. So, if you can afford to move and want to, it can be worth doing. You don’t want to push too far but getting up on the next rung of the property ladder is usually a good thing. Ultimately, buying and selling houses is such an individualistic game – it really depends on what you can afford, what you’re looking to buy or sell, and the advice you’re being given. There’s rarely a blueprint for anyone to follow.
There might be more volatility in the stock market on the way. If there is an interest rate rise, it could translate into bigger movements in company share prices as the market anticipates each economy update – in short, people will get nervous. It’s an important point to understand because it means ordinary people who invest need to be prepared for bigger changes in the value of their portfolios. It sounds obvious, but there will be factors which have affected some companies (and therefore their share prices) more than others over the last 12 months, and people should prepare to see that reflected in the value of their holdings.
Right now, investors need to realise there isn’t one particular asset class that looks particularly attractive. Bonds are running with inflation at 4%-5%, and are yielding about 1%, so real yields are about as negative as they ever have been. But you can’t spend your life putting your money into gold just to protect yourself. So, in my opinion, equities still look the most attractive option.