... And this is not some made
up story to capture the headlines of newspaper editors. The yield (posh word
for interest rate or return) on 10-year Government bonds is currently around
0.61 per cent. This indicates that the money markets believe that the Bank of
England’s base rate will, on average over the next ten years, be below the
0.61% rate they are buying the 10 year bonds at (because they would lose money
if the average was over 0.61%). UK Interest rates are going to be low for a looong
time.
For those who have saved
throughout their working lives and are looking for ways to maximise their
savings, tying their money into property could prove advantageous. You see as a
saver, I did a search of the internet and the best savings rate I could find
was a 5 year fixed rate at 2.5% a year with Weatherbys Bank. Your £200,000 nest
egg would earn you £5,000 a year – not much. However, on the other side of the
fence, growth in Aylesbury house prices and buy to let yields have made
property investment in Aylesbury an appealing option for many. According to my
research, the...
Average Yield over the last five years
for
Aylesbury Buy to let property has been 4.6%
a year
… and average Property Values
in Aylesbury over the same period have risen by 29.2%.
Using these averages, the Aylesbury
landlord’s property would be worth £258,400 and they would have received a
total of £46,000 in rent – making the total return £304,400. Meanwhile, whilst
our 6,677 Aylesbury Saver’s,
using the average savings rates for the last 5 years, even if they had
reinvested the interest, their £200,000 would only be £221,184.
There are risks as well as benefits
to buy to let though. As my blog readers know, I tell it like it is and
investing in buy to let means locking up capital in a property that may fall in
value. Another option would be stock market income based investment funds,
which are paying around 5%, especially if put your nest egg into a tax free Stocks
and Shares ISA. Although you can only add £15,240 a year
into an ISA, but you would also have the ability to sell up quickly if you want
... but one last thought…
The other side of the coin is that you
cannot buy an unloved ‘stock market income based investment fund’ and set about
renovating it and adding value yourself. The investment fund isn’t something
that you can touch and feel, isn’t something tangible, isn’t something
physical, isn’t something concrete, it is not bricks and mortar ... and that is
why the love affair of the British with Property
will continue.
If you are considering becoming a buy to let
landlord in Aylesbury, do you know enough about the Aylesbury property market
to be able to buy with confidence sure that the product will suit your
investment objectives now and in the future? Do know what strategies to employ
to reduce exposure to capital Gains Tax? Are you able to make your portfolio
more tax effective? How should you tackle Inheritance tax? Do what many Aylesbury
landlords do and visit the Aylesbury Property Blog where there is a host of
articles like this
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