Is it Better to Buy Property or Keep Money in the Bank?

Saving money is always a wise decision, but keeping your hard-earned cash in low-interest savings accounts isn’t the most effective way to build wealth. 

If you’re weighing up the decision between investing in property or continuing to save, we’re here to offer expert guidance. In this article, we’ll outline the benefits of investing in real estate over letting your money sit in the bank, helping you take the next step in securing long-term financial freedom.

Real Estate or Money in the Bank?

While saving money is undoubtedly important, the purchasing power of cash steadily erodes over time. As the cost of goods increases, the value of your savings declines, meaning any money you currently have sitting in the bank is losing value as we speak. 

Some key benefits of investing in property over leaving your money in low-interest savings accounts include:

• Steady Growth in Value

Historically, the UK property market has demonstrated consistent growth, establishing itself as a dependable asset for both experienced and novice investors. Property values tend to appreciate over time, providing investors with opportunities for substantial long-term gains. 

For instance, in January 2014, the average house price in the UK was £188,265 (UK House Price Index). By June 2024, this figure had risen to £305,000, according to the Office for National Statistics (ONS), reflecting a 2.4% increase from the previous year alone. 

In contrast, the Great British Pound (GBP) has consistently declined, eroding the purchasing power of your savings compared to when you first accumulated them.

• Potential Rental Income

Investing in buy-to-let properties can provide a steady income, especially if the property is situated in a desirable location with a high demand for rental housing. 

At Redmayne Smith, we provide our clients with exclusive access to off-plan properties in the most affluent areas across the UK. We also offer personalised investment strategies, catered to you and your unique requirements. Browse our latest investment opportunities now!

• Financial Stability

Investing in property offers a valuable opportunity to diversify your investment portfolio. 

Unlike the often volatile stock markets, real estate values tend to remain more stable, especially in sought-after locations. This helps to mitigate the overall risk of your investment, safeguarding your assets during periods of economic uncertainty.

• Asset Diversification

Real estate investments provide diversification benefits to an investor’s portfolio. 

Having money tied up in different types of assets, such as property, spreads the risk, while keeping all your money in a savings account concentrates risk in a single, low-yield option.

• Build Generational Wealth

Property can be passed down to future generations, allowing you to build and transfer wealth over time. 

Properties can provide ongoing income or a significant inheritance for your beneficiaries. Bank savings, while transferable, do not offer the same tangible and income-producing benefits that real estate assets provide.

• Tangible Asset

Unlike money in the bank, which can lose value due to inflation, real estate is a tangible asset that generally appreciates over time. Inflation erodes the purchasing power of your savings, reducing the real value of your money. In contrast, real estate often benefits from inflation, as rising prices tend to increase property values.

Owning property also provides you with greater control over your investment. You can physically see and improve the asset - something that isn’t possible with cash sitting idle in a bank account.

Why It’s Better to Buy Property Than Keep Money in the Bank

While keeping your money in the bank does offer a level of security, it’s not the best option for growing your wealth. Investing in property can provide higher returns, steady rental income, hedge against inflation and so much more. 

If you’re looking for a smart investment avenue that offers both financial security and practical benefits, investing in property is the clear winner. 

At Redmayne Smith, we’re proud to be your trusted partner for off-plan property investing. Founded by a handful of the UK’s most successful property investors, we’re on hand to simplify the investment process, helping you focus on selecting the right investment opportunity to suit your goals. To find out more, please get in touch with our team. 

We only work with trustworthy developers - and we even go the extra mile by arranging for our clients to visit the development site themselves - helping you feel as secure and confident as possible. 

To find out more about how we can assist you in achieving complete financial freedom, please get in touch. Call us on +44(0)1302 898807. Alternatively, book a consultation call with one of our experts today!