Property investment: Buy to Let or Buy and Hold?
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John Davies, Partner at Smith & Williamson Investment Management LLP, looks at the complexities of different property investment strategies
The decision to invest in physical property or a traditional investment portfolio has rarely been more challenging. Dinner party conversations have for years been dominated by seemingly ever-rising house prices and this has led both professional and private investors into acquiring Buy to Let property portfolios. More recently the sector has seen an unprecedented number of challenges including ever-changing tax regulations, economic uncertainty around Brexit and a prolonged period of relatively low investment returns, leaving property investors with decisions to make.
There is a sense the world we live in has become more binary and people's investment style has not been immune to this, investors are often either in the property or stock market camp. Both asset classes have over the longer term produced inflation-beating returns*, but, these strategies can have very different characteristics. Some prefer the perceived security of owning bricks and mortar whilst others value having ready access to their cash that an investment portfolio can offer. Tax treatment is also a significant consideration.
Both types of investor often have similar goals - to achieve capital growth and/or a reliable source of income. Deciding how best to do this requires many factors to be considered including tax efficiency, liquidity requirements and the benefits of diversification to name a few.
I will be co-hosting an event with my colleagues Louise Somerset**, Partner, Head of Private Client tax in Cheltenham and Bristol and Sue Faiers***, an Associate Director in our Personal Financial Planning department, where we will discuss scenarios around the different investment approaches with a focus on property versus more traditional investment portfolios.
We will look at whether a blend of the two can be achieved and consider the tax implications, including passing wealth to the next generation whilst also assessing whether these strategies are suitable in providing for your future needs.
* to 31.03.2019
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** Smith & Williamson LLP
*** Smith & Williamson Financial Service Limited
Property and investment seminars
You are invited to attend one of our complimentary seminars in Bristol and Cheltenham to hear from tax, financial planning and investment experts on how best to plan your property and investment strategies.
July 10, 10am - 1pm - Kings Weston House, Bristol
July 17, 10am - 1pm - Manor By The Lake, Cheltenham
Lunch will be provided at each seminar. For more information and to book your place, please contact Jessica Thompson on 0117 376 2368 or email email@example.com.
Capital at risk. The value of investments and the income from them can fall as well as rise and the investor may not receive back the original amount invested.
Smith & Williamson is an accountancy, investment management, financial planning and tax group with a network of 12 UK offices.
Offices: London, Belfast, Birmingham, Bristol, Cheltenham, Dublin (City and Sandyford), Glasgow, Guildford, Jersey, Salisbury and Southampton.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing. The tax treatment depends on the individual circumstances of each client and may be subject to change in future. Smith & Williamson LLP Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International. Smith & Williamson Financial Services Limited Authorised and regulated by the Financial Conduct Authority. Smith & Williamson Investment Management LLP Authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate the accountancy and tax advice services provided by Smith & Williamson LLP.