Following the drop in interest rates and subsequent notice by many banks that they will be dropping the rates in their savings accounts and ISA’s, a whole new raft of investors are now looking at property investment.
Over the last few months we have seen a large number of what we call “Vanilla Investors” contact us and enquire about some of our properties. Vanilla Investors are normally not too adventurous, they are happy with lower returns from their banks. Historically they could still receive 3-4% in high interest accounts or ISA’s.
The lowering of the BOE base rate has seen most high street banks slash their rates down as far as 0.25% for an ISA you would need to tie your money up in for at least 12 months.
The problem many bank clients now have, especially retirees is that they were depending on that money to supplement their pension, with such a dramatic reduction they are now looking elsewhere.
We recently had a client who showed me a letter from her well known high street bank stating her ISA is dropping from 0.75% to 0.25%., by the way she still needs to tie her money up for a year to get that!
To counter this, we recently sold 2 studio apartments at The Steel in Liverpool fully tenanted on 12 month tenancies for £50,000 each, these are giving an 8% NET return.
With the drop in interest rates and an influx of new investors has also come increased access to buy to let products at very favourable rates as low as 2%. These rates along with high yields mean some investors are obtaining over a 20% return on their cash invested.
With more information now available on what to look for and the structure needed to successfully invest in buy to lets there has never been a better time to look at property investment.
Most of our property investments are truly hands off investments with full management available after completion and many already tenanted, all thats left to the investor is to collect the cheque!
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