We explore whether it is still economically viable to invest in property since the stamp duty increase, and what sort of properties you can invest in to minimise the effect of the increase or completely bypass it altogether.The Impact of the Increase in Stamp DutyThe cost of an investment property in Birmingham is £168,062.00 which means you’d typically have to pay £5903 in stamp duty costs.The Increase in Stamp Duty Has Contributed to House Price SlumpOne of the main issues that the increase has caused, has been the increased cost in acquiring new property, which has subsequently caused a slump in house price inflation. Whilst this now means it is a good time for potential investors to consider purchasing additional properties, those who already own property will probably be disappointed with the growth in the market. In particular, property prices in London are most affected by the increase simply because house price are generally more expensive so the stamp duty levied on the properties is proportionately higher. This means that either demand may go down due to the high prices, or property prices may decrease to make up for the increase in stamp duty. In fact, Halifax’s April 2016 House Price Index announced negative growth in terms of house prices, as month on month April 2016 saw average house prices fall by 0.8%, which it attributed to a lack of confidence in the wider economy.The Increase in Stamp Duty Fails to Dampen Landlords’ SpiritsThe increase seems not to have deterred landlords, as the number of landlords has risen to 1.75 million. This has mainly been due to the increase in lending and cheaper mortgages, as access to funds is one of the main drivers in the property market. Another factor that has contributed to the increase in landlords has been the superior yields, far outstripping interest investors make on their money saved elsewhere.Another positive is that according to Halifax’s May 2016 House Price Index, house prices are resuming an upward trend, with month-on-month growth of 0.6%. This suggests that the British public still very much has an appetite for property, and is welcome news to existing property investors.Strategies to Avoid Stamp Duty or Minimise its EffectAlthough the increase may make some investors think twice about investing in property, it needn’t have to. There are plenty of ways property investors can work around the stamp duty increase or minimise its effect.Purchase Property in a Company NameStamp duty land tax can be avoided by purchasing property in a company name using a business mortgage. This also allows for interest payments to be tax deductible, exponentially increasing your return on investment because mortgages can be granted up to seventy-five per cent of the value of the property which amounts to a lot of interest.The Number of Mortgage Products Available to Limited Companies is IncreasingThe number of products available to limited companies is increasing year-on-year. In H1 2015 there was an average of 99 products available to limited companies, but in H2 this rose to 147 products.The number of mortgage applications made by companies now accounts for over a third (38%) of all mortgage applications, up from 15% in 2014. It’s also worth noting that mortgage acceptance rates are at an all-time high, so if you’re thinking of investing in property, now is a good time to apply for a mortgage.Avoid Stamp Duty Altogether with Alternative Investments Such as Car Park InvestmentsFurthermore, would-be buy-to-let investors are focusing on ways that they can avoid the stamp duty charges altogether or minimise its effect. Car park spaces are exempt from the 3% stamp duty charge because they’re classed as commercial property. Car park investments can also give an 8% net assured income for two years and has a five year exit strategy with buy-back option if you decide that the investment is not for you.Invest in Properties Outside of London for Lower Stamp Duty CostsAnother option is to consider properties in areas outside of London. As mentioned previously in the article, properties in London are more expensive so there is proportionately more stamp duty to pay. Cities such as Manchester and Liverpool command a much higher rental yield allowing you to maximise your profits. Properties in these cities outside of London are generally much lower, so the amount of stamp duty you’ll have to pay is much lower.Birmingham is consistently considered one of the best areas for buy-to-let, and was recently named by the Council of Mortgage Lenders (CML) as the number one buy-to-let hotspot outside of London. Average property prices in Britain’s second city are considerably lower than property prices in London. According to Rightmove, overall average property prices in Birmingham currently stand at £168,062, compared to £556,350 in London. For property investors, this means that if they were to invest in property in Birmingham, they’d pay exponentially less in stamp duty compared to investing in London property.Student properties in Liverpool such as Pembroke Studios command an assured net rental yield of 8% for five years had have a buy-back option after five years. Fortunately, in a city such as Liverpool there will never be a shortage of students looking for high quality accommodation due to its sizeable student population that comprises 12% of the city’s overall population. Pembroke Studios is conveniently placed within a mile’s radius of four universities in Liverpool, so it’s desirably situated for an overwhelming number of students.In conclusion, property investment is definitely still a viable way to achieve good returns, especially when interest rates for money kept in savings accounts is at record low. Property investors should make cautious decisions when it comes to investment, and consider investing in towns and cities outside of London where possible. For those looking to bypass stamp duty altogether, we recommend car park investments or other commercial investments that do not incur the charges.
With the ever changing world out there and available ways to pay your bills with a card for entertainment when you are on the go. Rather than having cash or having to withdraw cash the logical choice is a credit card and in this case because you are a frequent flyer a traveler and like to enjoy life to the fullest this is perfect for that type of person the visa signature entertainment card. The visa is beneficial in more ways than one as can be used for gaining rewards in entertainment. By booking your movie or theatre ticket online you will receive a discount and also be able to book in advance before tickets are available to the public, and also book hotels at a discount rate and much more.Facts about Visa Signature Entertainment credit cardMany banks provide this visa signature card there are a couple of different types that can be used and mainly for the benefit of the holder. The other is a small percentage of the transactions are passed on to a charity. Plus interest with this card isn’t using the variable rates like a common credit card, as the interest rates can change anytime without notice, but if changed whilst using this card they need to give notice in writing to the consumer at least a month in advance. For peace of mind your card is linked by a certain system called VisaNet and gives you direct access to any provider in this huge network of financial partners 20,000 + to be exact.Benefits of a Visa Signature Entertainment credit cardAs mentioned in the summary this visa can used to book any type of entertainment and you will receive a discount on your tickets bought. Also have access to the ticket before they go on sale to the general public and know about up and coming movies shows before the general public special events also like the circus coming to town. Another benefit of having the signature entertainment including the entertainment section is if the card is stolen there are emergency cash advances available normally within 24 hours. Travel insurance is usually provided when you use this credit for booking airline tickets. Another added extra is the Concierge service which provides you with recommendation on entertainment and hotels and business planning if needed also. Related to the cards benefits is the online resources to view and find tickets and all the time is updated daily with new promotions so one day maybe nothing you are after but the next a lot of eye opening deals and offers, so its best checked every day.Purpose of the Visa Signature Entertainment credit cardThe reason behind this credit was specifically for entertainment purposes so by offering the consumer the discounts to use their credit cards online and for entertainment it has given the sellers the chance to boost their sales and also offer the discounts related to the sale and benefit finally going back to the consumer. So apply today for the visa signature entertainment credit card if you want freedom to pay for your entertainment and flights, hotels and business trip to be planned in advance movies and concerts and even events like hot air ballooning, I would thoroughly recommend applying today to enjoy all these benefits offered to you as the consumer.Rick Ling