With the new trend sweeping the UK property market, this week Simon Morris questions whether it’s time to begin placing property funds into ISAs
The Importance of Property Market Trends
An independent, London-based property expert, Simon Morris uses his specialist knowledge of the property market to advise UK property investment funds on how to most effectively use their property portfolios to generate long-term revenue.
One way in which Simon does so, is through the analysis of current market trends. That’s why he couldn’t have failed to notice one new trend sweeping the UK’s property sector; ISAs.
How Does This Property Investment Trend Work?
With savings at the moment staying stagnant, a plethora of informed investors are examining the advantages of securing property funds into their ISA investments. This trend can be evidenced by property funds who are seeking to promote a larger return for ISA holders.
With these funds investing in UK property, ISA investors can expect to roughly be charged an annual management fee of 1%, with a return of up to 6%. Meanwhile, with the maximum initial new ISA (NISA) allowance measuring £15,000, a range of these funds are seeing returns climb as high as 12% on projected rental income and property growth.
Act with Caution
Therefore, this would translate into a tax free pay out at the end of a five year term of £12,150; a sum not seen for a standard cash NISA. Furthermore, the investment option also provides participants with an opportunity to become involved in the emerging London property boom, without the necessity of becoming involved in physical bricks and mortar stock.
However, like any other financial products, they come with risks for investors. That is why in speaking about the trend, Simon Morris recently urged caution, saying that “savers should only be looking to sign up to regulated financial products and seek advice from an Independent Financial Advisor.”
Follow the Golden Rule
So the figures would certainly seem to suggest that it’s time to begin placing property funds into ISAs. However, just like any other financial product, they aren’t without their risks, which is why Simon Morris would advise that you follow the golden rule before taking this option; act with caution and do your research.