UK Property Investment Offers Better Returns Than Fixed Rate ISA’s
UK investors are putting even more of their money into property investments rather than saving using an ISA because the returns can be far better.
UK property values have increased 11% year on year despite the property crash in 2008, however, the best fixed rate ISA offered by UK banks only offers savers an annual return equal to 1.85%.
The rise in UK property prices has caught the attention of diverse investors who would usually opt for different types of investment products to give them good returns on their investment funds.
Property investment in the UK’s private rented sector allows investors to build profitable rental portfolios that produce better yields than other types of investment funds, including ISA’s.UK property values have risen rapidly over the past 18 months, with property prices in London and the South East rising by 21%, which is 11 times the best ISA interest rate.
Property sales are up 18% and the number of first-time buyer applications have increased by 22% as the introduction of Government buyer incentives such as the Help-To-Buy scheme and improved mortgage availability fuel the recovery of the UK property market.
The UK property market continues to out-perform other types of investments during the first quarter of 2014 and does not appear to be slowing as more first-time buyers try to get on the property ladder and property investors continue to expand rental property portfolios.
The number of new UK property buyers increased 26% during 2013, with almost eight buyers registering for every new residential property instruction coming onto the market, in London this figure is closer to 14 buyers for every instruction.
This intense competition is being credited with underpinning price growth in the UK property market.
Whilst mortgage lending criteria remains extremely restricted with most mortgage lenders focusing more on the affordability of loans, so that another property bubble can be avoided.
However, the supply of property stock on the market is currently fairly low pushing property prices up further and if, as many economists predict, Bank of England (BoE) interest rates remain at record low rates until spring 2015, then property prices will continue to rise.
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