Is a buy-to-let property the best investment over time compared to gold?
This comparison calculator looks at the income and expenditure of a buy-to-let property over your selected period, to see how the final figures compare to simply buying and holding gold over the same period. Although gold does not provide an income, it can produce capital gains over time which can often outgrow the income and increases in property price combined. If you don’t need to have a regular income from your buy-to-let property and are simply banking any income for the long term and hoping to sell the property for a profit later in life, you might find the hassle-free option of holding tax free gold more advantageous financially.
When looking at the bar charts on our Gold vs Property page we can see the ratios of average property price to the average salary. Up to the year 2000, the average ratio rarely went above 4 times salary to the property price, however, after 2000 the property prices increased far quicker than the average salary and at the end of 2021 stands at just under 9 times average earnings to purchase an average property.
With UK property prices at an all time high when priced in currency (£), Inflation higher than at any point in history (central banks printing currency), and this inflation starting to show in the economy resulting in a rapid price rise in consumer goods, food and fuel and almost all every-day costs. Will people have enough income left for higher mortgage repayments to continue to fuel this property bubble?
It appears, with the rise in costs due to a depreciating £, and the change in tax laws, the days of the truly lucrative buy-to-let property investment may be over, for now.