Airport Car Parks – Why Are They So Expensive?
As the rise of low cost airlines brings flight prices down, you might expect travel to be cheaper for passengers. However, as airport parking becomes increasingly expensive, many people are paying as much on parking as they are on flights.
So what’s driving this trend, and what does it mean for passengers in the UK? Let’s take a look at why airport car parks are so expensive, and how this seemingly frustrating issue could work in the favour of the financially savvy.
Economics in Action
The answer is a simple case of supply and demand. Low cost flight tickets have led to a surge in passenger volumes in recent years. In 2014, Gatwick Airport had the busiest year in its history, with a 7.8% increase in passenger numbers that meant 38.7 million people passed through its terminals over 12 months.
As a result, many airports find that their car parks are full on a daily basis. And as the number of cars on the roads increases at the same time, it’s natural for parking prices to increase to deal with this surge in demand. After all, limited space in urban areas surrounding airports makes finding extra land for car parks a challenge.
A Lucrative Opportunity
Whilst rising car parking charges spell trouble for UK holiday makers and businesses that fly frequently, it does present a lucrative opportunity for investors. New car parks being built offer a secure investment opportunity, with almost guaranteed demand from drivers.
Whereas there continues to be no end in sight to low interest rates with banks, car parks offer a guaranteed net return of 8% in the first two years. Depending on usage, yields could be considerably more. A car parking space at Glasgow Airport worth £20,000, for example, would offer a minimum yield of £16,000 over 6 years.
A quick, easy and low maintenance alternative to property investment, airport car parks offer a fantastic return on investment to individuals looking to safeguard the future of their finances. Investors are given title deeds in their name, offering added security and reassurance that your assets are safe.
Increases in airport parking fees are inevitable, but like everything in life, this issue has a silver lining. Take advantage of this sustained trend and invest in airport car parks. In doing so, you’ll secure a fantastic low-risk income that will help you make your finances stretch further.
Whether your savings accounts are looking stagnant or you want to generate funds for the future of your family, these hands-off investment opportunities in the UK are not to be missed.