Financial advisor gives advice on investing in property

George Rashbrook from Sterling and Law Hampshire has given advice to potential investors on whether or not investing into property is a good idea in the current economic climate.

George says:

In the long term, property always makes money.

Very often it’s a question of timing. If you buy when a property is cheap you may make money relatively quickly; if you buy at the top of the market you may be waiting years before your profit is sufficient to make the whole thing look like it was a good idea.

UK residential property prices are at an all-time high. The market is dramatically overheating, fuelled by huge demand and not enough supply.

Is the market due a correction? Definitely. Will it happen? That’s anyone’s guess right now. Ultra-high inflation, increasing interest rates, and political uncertainty all point to a downturn in the market is imminent but still demand outstrips supply and prices are showing no signs of faltering.

There are important factors that investors need to take into account before jumping feet first into the residential property markets.

One is the question of taxation. You pay tax when you buy real estate (Stamp Duty Land Tax); then you pay tax when you own real estate (Income Tax on your rental yield); and you pay tax when you sell real estate (Capital Gains Tax); and even if you never sell it there’s a good chance the tax man will still take a big slice when you die (Inheritance Tax).

In recent years HMRC has made the tax treatment of buy-to-let investment even less attractive by limiting tax relief on mortgage payments for higher-rate taxpayers.

Some serious due diligence is required before you can make an informed decision to invest. Take independent financial advice, put yourself in an informed position and plan ahead.’

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Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.