Influx of ‘One-Time’ Property Investors Swapping Stocks for Bricks and Mortar

By Surrenden Invest | October 3, 2016
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Many investors are abandoning traditional institutional investment products, such as stocks and investment funds, for high-yielding property. These new investors are new to property, and many are selling up share portfolios to purchase an investment property. This is an excellent choice, but it is still important to remember the first rule of property investment – location is everything.

The summer of 2016 has been one of the most eventful summers as far as the UK economy is concerned. The reduction of interest rates from 0.5% to 0.25% appears to have been the catalyst to prompt investors to abandon parts of the stock market and add property to their newly diversified portfolios.

Alternative Investment Opportunities
With interest rates at their lowest since the Bank of England was founded in 1964, investors are abandoning institutional investment products for others that offer more favourable returns on capital. Just last week I received a letter from my bank informing me that my personal current account would no longer attract interest, the letter then when on to say that my savings accounts would also be subject to review next month. So the big question savers face is where to invest their hard earned cash?

If you are used to monitoring the financial markets, the prospect of selling out and purchasing a property may seem rather daunting, but rest assured, property is currently the safest and most resilient investment option.

Do Your Research
However, you must do your research and due diligence checks, as with any other investment. My advice is to tread very carefully as there are companies currently exploiting market conditions, promising colossal returns over a relatively short period of time and these are mainly what we refer to as alternative forms of property investment.

In my experience, the best property investments are the simplest ones; if it isn’t broken, don’t fix it. So why invest in something which is trying to re-invent the wheel? Our advice is to buy in the best areas and don’t compromise on location, especially when buying outside the capital.

Here at Surrenden Invest we help investors to tap into the lucrative UK buy-to-let market. Our residential property investments are in key areas that are already established, such as London, Birmingham, Manchester and Liverpool. In recent years, the Northern Powerhouse has been outperforming London. We prefer to offer a realistic return on your investment, which will provide a safer, long-term investment.

6% Net Rental Income and 3%-5% Capital Growth
If an investor called us today we would set their expectation at around 6% net rental income and 3%-5% capital growth, with an annualised yield over 5 years upwards of 10% net. We always strive to under-promise and over-deliver, and many investors enjoy yields and capital growth figures higher than this.

Buy-to-lets are a very simple investment and it is possible to request all the fixed costs, such as ground rent and service charges, and off-set those against similar properties that are advertised on Rightmove and Zoopla. This makes it very easy to determine how realistic the projected returns are.

To learn more about how the property market can strengthen your investment portfolio, contact Surrenden Invest today.

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