• Property prices in the UK have been rising for decades and seem to remain resilient against major economic shocks.
• In 2022, house prices rose 10.4% more than the previous year, while bitcoin dropped by 40.9%.
• Investing in a house may not be the best strategy due to economic turbulence and people having most of their wealth tied up in a 25 year mortgage.
Resilient Property Market
House prices in the UK have been on the up for decades, despite experiencing deep recessions such as The Great Recession of 2007 to 2009 and being impacted by Covid-19. This is due to certain factors unique to the UK which have provided an upwards push in property prices.
Property vs Bitcoin
In 2022, it was shown how house prices had outperformed crypto with house prices rising 10.4% more than the previous year, while bitcoin dropped 40.9%. Alice Bullard, Managing Director at Nested said that „the UK property market has not only posted a strong and steady performance in recent years but has outperformed the two leading crypto coins on an annual basis“.
Risk of Investing in Property
Despite this strong performance from property investment, investing solely in a house could put someone at risk due to economic turbulence making them unable to pay their mortgage if interest rates were hiked suddenly. Furthermore, tying up most of one’s wealth into a 25 year mortgage may not be ideal either when faced with powerful changes such as unemployment or price changes.
Bitcoin as an Option
In comparison to this, Bitcoin provides many options for those looking for an alternative form of investment that is less risky than investing solely in property. Bitcoin has outperformed house prices massively over time with regular bull and bear cycles which can help investors stay ahead of inflation and make gains from market volatility even when facing economic downturns .
Ultimately it is up to each investor as to whether they want to buy a house or invest some money into cryptocurrency such as Bitcoin. However it should be noted that Bitcoin provides numerous benefits over traditional investments such as property which makes it much easier for individuals to diversify their portfolios and protect themselves from economic uncertainty.