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Should 3% extra stamp duty put you off property investment? NO not at all.

Firstly, what are the alternatives?

Shocks and scares (stocks and shares), Forex, ISA, savings accounts, bonds, trusts...... all have potential but at the same time huge volatility.

oh no

None have the bricks and mortar stability and appeal.

3% extra Stamp Duty is, on face value, a bitter pill to swallow.

However property values, since records began with Nationwide over half a century ago, have risen at an average of 8.1% a year.

Looking in a pessimistic way at investment into property for capital value growth profit, the additional 3% Stamp Duty would mean that some of the first years growth in capital value has been consumed by tax.

There is still likely some capital value profit in the first year and if the deal is structured well rental profit to add to this too. Then from the second year onwards the full property profits are received.

Recent data from two large multi branch estate and letting agents show the average UK landlord to have made returns of 12% from January 2015 to January 2016.

Their average figures show a return of £21,988 over the last 12 months, before deductions. Of this, the average capital gain contributed £13,594 while rental income made up £8,394.

We believe their average figures are not created from smart investors who profit at the point of purchase by buying at a discount from the market value. Equally they are quoting gross yields of around 5% which is significantly lower than the opportunities Earnest Knight source outside of London.

What this means is those investors that have had their desire to invest further or begin a portfolio dampened by the additional 3% should run the figures again.

EK-stamp-duty-calculator

Once they recalculate they will see that this 3% is insignificant in the grand scheme of their investment in property and the returns property provides.

The two estate agents calculations do not reflect the enhanced returns provided by an Earnest Knight below market value acquisition or the enhanced yields well in excess of the 5% they quote.

What little difference an extra 3% tax makes when you benefit from 15-30% off the value of a property!

how to profit


If after reading the above you are one of those savvy investors that want to make the most of the historically safe and profitable UK property market but maybe because you are too busy at your own work and cannot find the time you think it’s not for you just now, do not worry:

This is where Earnest Knight Consulting excels and specializes in helping investors with thorough due diligence and selection process we implement before we commit to any deal.

This in turn helps our investors not only on the profitability side, but saves tremendous amounts of time and money in research for our clients and is one of the reasons why we are highly praised.

Do not miss the next decade of potential growth, CALL US NOW!

An informed investor is a successful investor!

For the current research results and the best choice of property investments, as selected by property buyers, in the UK market do not hesitate to contact your Earnest Knight Consultant today

Information is free and can only be of benefit to you

CALL:                        0208 6109 472

FREEPHONE:             0800 3689 317

EMAIL:                       enquiries@earnestknight.com

 

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Office Direct      0208 6109 472
Freephone 0800 3689 317
Email enquiries@earnestknight.com

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