Women in the UK were not legally allowed to buy property until the 19th century, and at first, only if they were married. It wasn’t until the Sex Discrimination Act was passed in 1975 that a woman could open her own bank account.
We’ve come a long way since then. Thankfully, these days no-one would bat an eyelid at the thought of a single woman managing her own money or buying a house for herself. Yet there is one area of finance in which women remain vastly under-represented, and that’s property investment.
Why do women shy away from investing in property?
In the 10 years since I founded My Mortgage Angel, I’ve worked with plenty of people who are eager to invest in property. These people have one thing in common: all of them are men. While some women are happy to invest alongside their husbands, they rarely do so alone (or never, in my personal experience!).
Of course, money can be a significant factor. More than 50 years after the Equal Pay Act, on average women still earn less than men. Women also tend to be primarily responsible for the care of their children or older relatives, which can have a detrimental effect on their earnings. Mistaken, gender-entrenched beliefs, such as “men are naturally better at investing” can be confidence-draining for a single woman.
However, I’ve also seen first-hand how much more risk-averse women are when compared to men. Risk aversion is an extremely useful quality to have in many areas of life. Sadly, it can also prevent women from increasing their wealth and securing their futures through viable financial options like property investment.
What are the benefits of property investment for women?
Investments of any kind always come with a certain amount of risk. But many people choose to invest in property because of the likely rewards: a monthly rental income, a potential hedge against cost-of-living increases, and a tangible asset that can be sold or leveraged for later-life security.
For existing homeowners, using a mortgage to buy an investment property can be a sensible option. Generally, you will need a 25% deposit (or 20% for properties with a high energy performance certificate – or EPC – as the UK government is keen to incentivise greener properties).
The mortgage amount is then determined by the property’s potential rental income, rather than your personal income and expenditure. You may also have the option of an interest-only property investment mortgage to help keep monthly payments low, though be aware that you will need to keep some money aside for property repairs and ongoing maintenance.
As an expert mortgage broker, I’ve helped many people leverage their investment properties to provide a pension pot later in life.
This can be a particularly attractive decision for women entrepreneurs in need of financial security post-retirement. Options could include selling the investment property outright, or releasing some of its equity to provide a tax-efficient lump sum.
Property investment mortgages come in a variety of forms, suited to individual needs and investment priorities. Additionally, my (sensibly risk-averse!) advice always begins with, “make yourself secure first, then we can look at viable investment options together”.
If you’d like to discuss the property investment options available to you, scheduling a chat with your financial adviser would be a great place to start.
I am also happy to provide further advice about investment property mortgages as required. You can arrange an appointment for this using these links depending how long you would like to talk:
