Inflation is demolishing real returns on UK housing stock

[diyhelp]

Inflation has increased from 0.9% to 3% over the last 12 months while house price growth has fallen slightly from 5.9% to 5%. Do all investors realise the damage that inflation is doing to their real returns?

 

[nmb]

In the unique environment we are in today do you not think there is a chance we might see negative real term house price growth very soon? I am not saying it will last forever but we could slip into that range for a short time?

 

[PostBrexitInvestor]

Long term demand for UK property will remain strong as even upon leaving the EU and free movement of the EU population there will still be relatively high immigration to the UK. Some people seem to think that on leaving day immigration simply stops - not the case, we will just refer to a new immigration system.

 

[lookinginvest]

Totally agree, it is a myth to suggest that UK immigration will simply collapse when we leave the EU. In simple terms there will be more checks on those entering the country - is this really such a bad thing? It has worked ok for Australia where the property market has been in a bull phase for more than 50 years!

 

[realdeals]

If you look at this from a buy to let point of view it is now so bad as rental yields are reaching double digits in some areas of the UK. However, where you find high yields you will likely find low capital appreciation and vice versa.

 

[PostBrexitInvestor]

If you can maintain the "real value" of your UK real estate assets through these choppy waters caused by Brexit you should be fine in the medium to longer term.