Fixed return property investments better than buy to let?
Fixed return property investments are on the up, though it’s sad to see what appears to be a buy to let crisis looming on the horizon.
For landlords anyway, at least. The government is set to rake in close to £7 billion over the next five years thanks to changes in legislation, carrying on from the stamp duty rises put into effect by previous Chancellor George Osborne.
What does it mean for UK property investments? Put simply it means that investors are looking more at fixed return property investments and bonds to make potentially serious money from bricks and mortar, rather than subject their savings and future finances to a murky future.
Are buy to let UK property investments right for you?
We don’t make these comparisons lightly; rather, data is showing that one-in-four landlords are now selling their initial property investments because of the financial hardships that buy to let is now presenting to them.
Things aren’t going to get much better too, meaning people that took the plunge on other homes as buy to let property investments are set to face future tax increases to complement the changes in stamp duty they’re already having to cope with.
Between 2017 and 2020, landlords will have to pay tax on the full amount of the profits they earn, less tax relief fixed at 20%. That’s terrible news for mortgaged landlords who have taken out buy to let property investments that are paying 40-45% tax. They’ll be paying much more, as will some basic-rate taxpayers that will be pushed into a higher bracket.
Some people become a buy to let landlord simply for the sheer love of all things property and the satisfaction it provides. It’s fair to say though that the majority enter the market to grow their savings – a prospect that looks further away than ever thanks to changes in legislation.
How fixed return property investments can grow your savings
The burden may be eased far into the future, but for savers and investors looking to grow their money with retirement imminent, can they really wait in hope that things may change?
The Bank of England is also set to make it harder than ever for buy to let investors to borrow thanks to a crackdown in their mortgage policies. With Chancellor Philip Hammond also banning letting agents’ fees in his recent autumn statement, problems keep on piling up for people that want to or have invested their time and money in the buy to let market.
It’s part of the reason why people are looking more toward property bonds and fixed-rate asset-backed alternative investments in the housing sector.
The right investment can not only help people avoid a lot of those situations when growing their money, but provide them with low entry level investments while providing quarterly or bi-annual payments alongside capital growth options.
If you’d like to know more about the incredible, potentially high returns fixed return property investments can provide – possibly up to 42.5% depending on the options you invest in – contact Heron Global Partners today to find out more.