Five investment options beating buy-to-let returns

The latest research by peer to peer finance platform, Sourced Capital, has looked at the best alternative investments to make for those currently wary about entering the buy-to-let market due to the current pandemic.

Changes to stamp duty and tax relief have already caused many landlords to reconsider their buy-to-let investments and with the current pandemic causing the government to halt evictions while offering landlords a mortgage holiday to compensate for tenants who can’t pay their rent, investment into the sector is predicted to decline even further.

At present, the average UK property provides a rental yield return of just 5%, 4.2% when investing in bricks and mortar in the capital.

Bonds, ISAs and savings accounts may provide a more hands off return but these returns sit between just 0.4% and 1.2% a year on average.

So what else can you invest in while uncertainty remains?

Since 2005, investing in jewellery has proved a better option than buy-to-let, with an average annual return of 6.7%.

Vintage watches, in particular, have held their value with returns of 8.4% per annum.

For those that wish to remain in bricks and mortar without the complications of a hands on investment, peer to peer platforms such as Sourced provide the option to invest in an Innovative Finance ISA and enjoy the returns of a largely consistent property market without the management required of a buy-to-let property.

The IFISA is a category of ISA which was launched in April 2016 for UK taxpayers and can provide returns as high as 10-12% an annum, although capital is of course, at risk. Previously, there have been two main types of ISA: Cash ISAs and Stocks and Shares ISAs.

Similar to a Cash or Stocks and shares ISA, an IFISA allows you to invest money without paying personal income tax. This enables you to invest your money into the growing peer to peer market.

Like cash ISAs Each tax year, you get an allowance of up to £20,000 to put into IFISAs which you can distribute across your different ISAs should you wish to. In addition, you can transfer your previous year’s ISA investments into your IFISA.

However, in current lockdown conditions, you may want to opt for an investment into fine wine or classic cars. If you can avoid the temptation to drink it, fine wine has seen an average annual return of 13.2% since 2005, while classic cars top the list with a return of 16.4%.

Category
Information
Average annual % return value
Classic cars
Annual average since 2005
16.4%
Fine wine
Annual average since 2005
13.2%
Sourced Capital – property investment
Alternative peer to peer investment platform – property development
10.0%
Vintage watches
Annual average since 2005
8.4%
Jewellery
Annual average since 2005
6.7%
Buy to Let rental yield (UK average)
Average house price (Feb 2020) = £230,332 and average private rent (March 2020) = £959
5.0%
Buy to Let rental yield (London average)
Average house price (Feb 2020) = £476,972 and average private rent (March 2020) = £1673
4.2%
Fixed rate ISA (1 year)
Average rate for 2020 – fixed rate ISA for a set term
1.2%
Fixed rate Bond (2 year)
Average rate for 2020 – fixed rate bond for a set term
1.1%
Fixed rate Bond (1 year)
Average rate for 2020 – fixed rate bond for a set term
1.0%
Variable rate Cash ISA
Average rate for 2020 – cash ISAs that are easy access and pay variable rates of interest. In other words, you can get your money when you want but the interest rate can go up or down
0.6%
Instant access savings
Average rate for 2020 – normal instant access savings account
0.4%
Sources
Average house price
Rent
Savings statistics
Other investments
Bonds

Properganda PR

National and local media coverage for property businesses. Journo quotes delivered in minutes.

You May Also Enjoy

Breaking News

Breaking Property News – 28/03/24

Daily bite-sized proptech and property news in partnership with Proptech-X.   tlyfe the tenant App gets huge marketing boost from national team tour from the Openbrix team As many will know tlyfe, powered by OpenBrix, is the UK’s most innovative tenant lifecycle app, taking the stress out of the move in process and helping to…
Read More
Breaking News

Over Four Out Of Five Tenants Unaware Of The Renters Reform Bill

OVER four out of five tenants remain unaware of the Renters (Reform) Bill and its contents, according to new research. The data comes from a representative survey of over 2,000 private renters conducted by the TDS Charitable Foundation, which works to advance education about housing rights and obligations in the private rented sector. The Bill…
Read More
Estate Agent Talk

What is Property Damage in a Personal Injury Case?

Property damage refers to any damage that affects things instead of a person. This might include damage to your car, house, etc. As such, it is not regarded as a personal injury case. However, when an individual is injured when the accident occurs, the affected person can file a personal injury claim. A typical example…
Read More
Love or Hate Rightmove
Breaking News

Rightmove comment on new 99% first-time buyer mortgage product

Matt Smith, Rightmove’s mortgage expert said: “It’s encouraging to see lenders continuing to try to innovate in the mortgage market, even after the government abandoned its own plans to encourage lower deposit mortgages in the Spring Budget. This new product has the potential to help some first-time buyers who fit the affordability criteria, but are struggling…
Read More
Breaking News

Breaking Property News – 27/03/24

Daily bite-sized proptech and property news in partnership with Proptech-X.   Coadjute ahead of the game as they are already licensed to provide digital TA6 Forms to property stakeholders This week, the Law Society announced its TA6 Form will now include Material Information as per the the National Trading Standards Estate and Letting Agency Team…
Read More
Breaking News

Breaking Property News – 26/03/24

Daily bite-sized proptech and property news in partnership with Proptech-X.   Sharing Success: The Guild Conference and Awards celebrate Member achievements The QEII Centre in Westminster, London, was abuzz with excitement on Friday, 22 March 2024, as The Guild of Property Professionals hosted its highly anticipated annual Guild Conference and Awards. Under the theme ‘Sharing…
Read More