Property Versus Gold

Deciding between these two forms of investment comes down to the heart of what investment is all about – trying to predict future trends in the market. The UK property market has been growing consistently but there are storm clouds on the horizon – rises in stamp duty on buy-to-lets, reduced tax breaks for buy-to-let investors and the upcoming financial turmoil stemming from both the Brexit referendum and the worsening political climate overseas.

The property market has been driven by Chinese investment from overseas, as have many others, but with cracks appearing in China’s economy and repeated currency devaluations this drive is beginning to run out of steam. A shrinking economy will impact every other region around the world and leave demand for UK buy-to-lets through the floor, fuelling a drop in house prices and therefore in the value of property investments.

Gold on the other hand has seen some turbulence as a result of political events (the largest spike and subsequent slump in the metal’s recorded history was in 1970 with the end of the Bretton-Woods agreement and the Nixon Shock) but has otherwise seen a steady price rise. The 2008 financial crisis and subsequent recession saw many investors realising the value of a reliable physical investment that retains its worth even in adverse market conditions, resulting in consistently high gold prices that have only been buoyed by recent political turmoil. With further political shocks on the horizon (Article 50, the oncoming Italian banking crisis and the unknowns of America’s economic future), gold prices look set to both remain high and see more sharp rises, providing opportunities for quick-thinking investors to liquidate their assets at a profit.

Conclusion: Gold

In conclusion, while the property market does provide the potential for both profit and security, once again there’s no substitute for the stability, convenience and comparative affordability provided by physical gold. With the high barriers to entry and maintenance requirements, property investment can rapidly become a full time job, exposing the investor to significant risk. Many private investors have chosen to invest in physical gold rather than property thanks to gold’s tax advantages and high liquidity.

In addition, gold investment benefits from several tax advantages – no stamp duty, reduced VAT and even exemption from the Capital Gains Tax for some forms of gold investment like legal tender Britannias. Both forms of investment are viable, but for those looking for a secure, hands-off investment there’s no beating tax-free physical gold as a form of gold investment.