With many savings accounts and ISAs offering interest rates below 1%, you’d be forgiven for wondering where it’s best to place your cash savings. Hampstead estate agents TK International suggest that investing your money in London property - particularly in Hampstead and the surrounding areas - is a viable alternative to bank accounts.
Some High Street banks are offering interest rates at a piffling 0.01% - that is £1 for every £10,000 saved. Even Chancellor Philip Hammond’s announcement of a 2.2% three-year NS&I bond in last year’s budget is only based on savings up to £3,000, giving savers £198 in interest. Saving the traditional way isn’t paying in the current economy.
Contrast this with buy-to-let yields in TK International’s catchment areas, where returns of around 2-4% are commonplace and you begin to see property returns double, triple and even quadruple that of High Street accounts.
Investing in property has garnered some bad press of late due to changes in the way lets are bought and managed. Despite this, there are still gains for those with the right financial circumstances. Daniel Epstein at TK International comments: "Many people in Central London find themselves cash rich, either through downsizing properties and releasing equity, through inheritance, through investments maturing and through sheer hard work. Putting money into saving accounts is tantamount to stuffing it under a mattress, so those looking for good returns should consider buying property.”
Bricks and mortar can bring two revenue streams for those in the most able position. “Cash buyers, those entering buy-to-let with no mortgage and investors with substantial deposits will benefit the most from monthly returns” adds Jeremy Karpel. “With no home loan to factor into monthly outgoings, these landlords can still make short-term income despite new and forthcoming buy-to-let changes.”
Even investors with more modest deposits will see potential in property. “While there may be dips and troughs in the London property market, overall if you are able to commit for a period of time you will see growth in your investment via price appreciation.”
To illustrate house growth over the past 15 years, TK International uses an apartment for sale in Belsize Park as an example. "The property was last sold in October 2001 for £465,000 but today the same property is being sold by us for £1,195,000 - growth of an amazing 256%. Even if today’s investors make a fraction of this figure, it will dwarf returns currently advertised by banks and building societies.”
Hampstead is a great area in which to invest and live, with an eclectic mix of beautiful properties ideal for single professionals and families through to international tenants and empty nesters. Its close proximity to Central London, excellent transport links, green open spaces and places to socialise make it an ideal choice for many investors.
"While investing in a Hampstead property is a big step, TK International has a comprehensive property management team in place offering peace of mind throughout the whole lettings process. From tenant finding, rent collection and the day-to-day running of the buy-to-let to dealing with maintenance issues, making sure the tenancy is legally compliant and conducting property inspections, we can ensure any buy-to-let is hassle-free and hands off for our landlords. It’s our business to protect assets and to make them work hard for the investor, maximising returns at every step” concludes Daniel Epstein.
If you are looking to invest in Hampstead or the surrounding areas, please visit our landlords’ area on the TK International website or contact our office today.