Property as an Investment Option Remains Popular

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Property as an investment option remains popular in the UK in spite of the recent changes to tax rules.

Perry’s Chartered Accountants recently revealed that 35 per cent of the UK are more confident about property as an investment option than any other form, including pensions and ISAs.

It was also discovered that 8 per cent of people are relying on the equity from their property as their main source of income for retirement.

Research that was carried out by Halifax last year found that the UK’s housing wealth had passed the £6 trillion mark for the first time. The majority of the property wealth was found in London and the South East. It is estimated that the average net equity worth of each property is £247,233. 

£25,000 per annum is needed at retirement to maintain a similar lifestyle, meaning that equity from a single property could provide up to 10 years of income. However, this does not consider other costs associated with releasing the equity, such as estate agency and legal fees or any stamp duty charges. These could reach thousands of pounds once all added together.

CEO at Perrys Chartered Accountants, Stewart Pope, said: ‘Whilst maintaining your current lifestyle will always be the first consideration, it is also important to be aware of the other possibilities that life can throw at you, such as ageing relatives, long-term illness, or the chance you might need residential care in the future.’

The recent introduction of auto-enrollment for employee pensions is hoping to help Brits feel secure in their old age. However, only a quarter of those aged between 35 and 54 felt confident in pensions as a future investment. 40 per cent stated that putting their money into property would be their first choice. However, the Government’s latest changes to tax regulations and the increase in the stamp duty charges paid on second homes are making property investment a more difficult feat.

Stewart continued: ‘It is worth taking a look at your existing assets to see how you could maximise potential for the future. With the right advice and some effective tax planning you could find that this makes a long term difference to the shape of your financial future.’

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