Property an Increasingly Attractive Option for Young Investors

Young savers are turning their back on the traditional investment markets and looking to buy-to-let property to provide themselves with financial stability in the future. According to an article in the Financial Times, young investors have been “scarred” by watching their parents and grandparents lose big chunks of their pension pots following the economic downturn.

As a result, wealth managers are now reporting that young people are moving away from equities – traditionally seen as a safe and prosperous investment sector – and looking to flats, houses and country cottages to rent for a more stable way to grow their assets.

Thirty-one-year-old company director Oliver Sloboda is one of those taking this route. He told the publication: “My dad thinks I’m mad, but it’s a generations thing. My friends, those who work in banking and who have bonuses, have done the same and bought property.

“I don’t know anyone who would take a lump sum and give it to a pension manager. You read stories about pension funds collapsing and volatile equities and high fees and it isn’t appealing.”

Owning a holiday home not only provides a relatively stable place to store cash assets, but can also provide a regular income through renting.

Rising interest in buy-to-let has also led to a diversification in the type of property being chosen. Research from Paragon Mortgages shows that professional landlords are broadening their horizons with more looking to invest in city-centre flats and detached properties, such as holiday homes, in the final quarter of 2012.