Fri, 21/03/2014 - 16:08
Nine out of ten (86.4 per cent) IFAs expect UK house prices to increase during the next three years and four out of ten (40.4 per cent) would increase their personal exposure if it was easier to do so in a tax-efficient manner.
That is according to new research from Castle Trust, which offers investment products that track or beat the Halifax House Price Index.
This increased appetite is mirrored in the demands of their clients, with 42 per cent more IFA clients showing an interest in residential property as an investment.
The new survey with 104 financial advisers reveals that between now and 2019, 86 per cent of advisers expect house prices to rise – with one in 20 anticipating a dramatic increase. When looking at the next 10 years, only six per cent expect prices to fall and one in 14 think they will rise by over 50 per cent. By 2024, financial advisers on average think that house prices will increase by around 21 per cent, which would add GBP37,773 to the value of a typical home.
The research reveals that over 40 per cent of IFA clients want to increase their investment in residential property. According to the survey, the most common barriers to investing in a buy to let property are:
1. Getting a deposit together (49 per cent),
2. Worries about tenants or lack of tenants (51 per cent) and
3. Hassle (41 per cent)
Sean Oldfield, chief executive of Castle Trust, says: “It is clear that confidence in the entire UK housing market is finally taking hold and is no longer just confined to London & the South East. This is starkly apparent from our own results - we have witnessed record flows into our Housa products, presumably because their returns are tightly pegged to the Halifax House Price Index. Our Housa products provide a simple alternative to buy to let which has never before existed – which opens up the chance for more people to invest in residential property who previously weren’t able to do so.”
Housas are a low cost and tax-efficient way to get exposure to the housing market. Unlike property funds, there are no upfront or ongoing management fees. Housas typically qualify for inclusion as an ISA, Junior ISA or SIPP with a minimum investment of just GBP1,000. Investors are eligible for protection by the Financial Services Compensation Scheme of up to GBP50,000 per individual.
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