Get to know us and follow our latest adventures both in the office and further afield
The UK Residential Market: A New Frontier?
August 12, 2010Article by Ray Withers
Invest in the UK Residential Market Through Your SIPP … And Beat CGT!
This is another example of the new type of investment product we are promoting over this summer. Property Frontiers has secured a channel to a continuous supply of discounted residential properties across the UK market via a partnership with a UK property brokerage and sourcing firm. More than 300 deals have already been completed and new stock is being continuously secured.
The discount is measured against RICS statistics rather than historic peaks. With average discounts of 25%, this means a real discount of 30% against the market peak of October 2007. Key Advantages Include: an immediate equity gain; solid investments with tenants already in place; rental yields of 7-12%; average ‘real’ discounts of 30%; invest via your SIPP.
One of this product’s best – and most unusual – features is that you can invest in it via your Self-Invested Personal Pension (SIPP). The key characteristic of a SIPP is the wide range of investment choice it provides across the market – as opposed to restrictive traditional pension plans. Through this Property Frontiers package, clients who have a SIPP will be able to use it to invest in discounted UK properties. SIPP investors enjoy tax relief on contributions and investment returns are generally fee from income tax and Capital Gains Tax (CGT).
On retirement or when the investor is looking to draw an income, 25% of the current value of the plan can be paid as a tax free lump sum. This opportunity therefore allows SIPP investments exposure to the UK residential market without the threat of CGT! But with or without a SIPP, you can gain access to the residential property market at well below the usual market price.
The primary focus of Property Frontiers is and will continue to be investment overseas. But the home market is also a ’frontier’ that we are not afraid to cross.
Written by: Aidan Rankin