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Em Morley

Edinburgh ‘best place to live’ in UK

Published On: December 5, 2015 at 11:48 am

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The latest Quality of Life index from uSwitch.com has revealed that Edinburgh is the best place to live in the UK.

There was bad news however for inhabitants of Bradford, which was found to be the worst region. Scottish areas made the most substantial rises in the rankings.

Positive positioning

A low crime rate, affordable living costs, large average salaries and a quick broadband connection have all been factors in driving Edinburgh to the top position.

As a whole, the uSwitch survey looked at 138 local areas for 26 factors, including salaries, household income and the cost of living. Lifestyle factors, such as working hours and life expectancy, were also taken into account to provide a solid picture of the quality of life in each region.

Edinburgh has seen a seismic rise to the top, rising 97 places since the last Index in 2013. The city has the lowest crime rate in the whole of Britain, low petrol and energy bills, average salaries of £29,588, disposable household income of £20,083 and average broadband speeds of 30Mbs.[1]

Scottish smiles

The Scottish capital was not the only region north of the border to see gains in its Quality of Life ranking, with the top seven ranking risers also from the country. In fact, 13 out of the 20 regions that saw the largest gains in their ranking were from Scotland. The largest rise was recorded in the region of Inverclyde, East Renfrewshire and Renfrewshire, which rose 102 places from 112th to 10th. [1]

However, England is home to 16 of the 20 biggest falling regions. Bradford and Hull are stuck to the bottom of the Index. According to data from the report, people in Bradford have the lowest gross disposable household income of £13,654 per year, yet pay one of the greatest average weekly rents of £92.60. Employment in the area is low at 65% and the life expectancy is lower than the national average. Additionally, the region has crowded primary schools and just 44% of pupils obtained five A-C grade GCSE’S at Key Stage 4.

Top-tens

Data from the UK Quality of Life Index 2015 indicates that the top-ten regions to live in are:

2015 ranking Region 2013 ranking Change in rank position since 2013
1 Edinburgh, City of, Eastern Scotland 98 +97
2 Solihull, West Midlands 1 -1
3 Hertfordshire, East of England 3 0
4 Northumberland, North East 8 +4
5 South Lanarkshire, South Western Scotland 60 +55
6 Berkshire, South East 9 +3
7 Darlington, North East 25 +18
8 North Lanarkshire, South Western Scotland 106 +98
9 York, Yorkshire and Humber 15 +6
10 Inverclyde, East Renfrewshire and Renfrewshire, South Western Scotland 112 +102

[1]

Edinburgh 'best place to live' in UK

Edinburgh ‘best place to live’ in UK

The bottom ten regions in the Index are:

2015 ranking NUTS3 region 2013 ranking Change in rank position since 2013
138 Bradford, Yorkshire and The Humber 95 -43
137 Kingston Upon Hull, City of, Yorkshire and The Humber 130 -7
136 North of Northern Ireland, Northern Ireland 68 -68
135 Eilean Siar (Western Isles), Highlands and Islands 120 -15
134 West and South of Northern Ireland 59 -75
133 Blackpool, North West 117 -16
132 Devon CC, South West 86 -46
131 Central Valleys, West Wales and The Valleys 121 -10
130 East of Northern Ireland 39 -91
129 South Teesside, North East 93 -36

[1]

Inspired

Ann Robinson, Director of Consumer Policy at uSwitch.com, said, ‘Edinburgh has long been a city that’s inspired; a vibrant city with striking architecture and a world famous festival, all surrounded by stunning scenery. Now it’s official-Edinburgh is the best place to live in the UK. With low crime rates, high wages and affordable living costs, it’s not just the history and cultural attractions that are drawing people to Scotland’s capital.’[1]

‘And while Edinburgh sits proudly at the top of the spire, Scotland as a whole is the star performer, with it’s regions easily making the biggest climbs in the ranks this year. Contrast that with the biggest fallers in the rankings, the majority of which are regions in England,’ she continued.[1]

Differences

Robinson notes that, ‘What this report reveals is the vast differences in the quality of life that many people across the UK are experiencing. Despite a buoyant UK economy, millions of people in this country aren’t feeling the benefits. We shouldn’t kid ourselves that it’s getting better for everyone out there. The reality is that millions of British households are still facing huge financial pressures, with wages barely covering higher living costs. And with talk of interest rates rising, any hope that those financial pressures might ease seems a forlorn one.’[1]

‘It’s more important than ever that households take an honest look at their household budgets and see if there are savings that can be made. Simply by switching energy suppliers on a regular basis, hundreds of pounds could be shaved off the annual bill. Our quality of life is important and even minor changes could have a positive impact on our standard of living,’ Robinson concluded.[1]

[1] http://www.propertyreporter.co.uk/property/best-and-worst-places-to-live-in-the-uk-revealed.html

 

 

The Plight of Britain’s Empty Homes

Published On: December 5, 2015 at 11:09 am

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Despite the country going through a severe housing shortage, hundreds of thousands of homes in the UK are empty. So why do these property owners leave their assets vacant?

One particularly extreme case of unoccupied housing is the Bezier building in London’s Old Street area. Located in one of the priciest and trendiest parts of the capital, flats in the block can cost over £1m and monthly rents of £2,000 are charged.

However, more than five years after it was completed, the Bezier is almost half-empty.

Islington Council reported that as of July this year, 42% of the building’s units did not have registered voters living in them. The local authority blames the practice known as buy-to-leave, where wealthy investors, usually from abroad, buy properties and leave them empty. Not only are they missing out on rent money, they are adding to the country’s housing crisis.

And although the headlines are filled with facts and figures about how many homes are needed, there are currently 610,123 empty homes in England, according to the Government. Of these, 205,821 have been vacant for six months or more – the official definition of long-term emptiness.

In September 2014, there were 31,884 long-term empty properties in Scotland and 23,171 homes were unoccupied in Wales for six months or more during 2014-15.

So why would investors leave a property empty and miss out on rent or not bother selling it?

The Mayor of London, Boris Johnson, criticises rich investors for using new build homes as “blocks of bullion in the sky”1, although he added that putting restrictions on investment in London would be wrong.

The majority of people will question why these property owners throw away huge sums of rent money.

But property expert Henry Pryor believes that these investors are being highly calculating; the cost of letting, including repairs and administration, can exceed rental income, he says.

And in the prime new build market, he claims that buyers wish to purchase a pristine property: “Some buyers don’t want to live somewhere second-hand, just as they would feel if buying a Rolls-Royce or an Aston Martin. This applies even when they’re buying a place that’s five years old.”

However, these buy-to-leave investments account for just a small proportion of unoccupied properties. The charity Empty Homes states that more often, the issue is caused by ordinary financial difficulties.

Chief Executive of Empty Homes, Helen Williams, explains: “One of the most common reasons that properties are empty is because the owner cannot raise the money to do the property up to let it out or sell.

“Perhaps they previously rented it out and it now needs more works done to it, or maybe they inherited it.”

She adds that if a property was jointly inherited, it can take years for beneficiaries to decide what to do with it.

A house in York Road, in the North Yorkshire seaside resort of Redcar, was left empty for years after the owner was unable to fund improvements. Community Campus 87 stepped in to renovate the home, using the project to train apprentices.

“It was a mess,” comments Ian Cockerill, of the organisation. “It was right at the entrance to the town and was putting people off.”1

Empty Homes has analysed Government data for England, finding that overall, parts of the north tend to have a larger percentage of unoccupied residential properties that areas in the south.

Additionally, seaside towns are also more likely to experience the issue.

In some parts of the country, it is not just individual properties but whole streets that are vacant, due to areas become less desirable to live in. This could be caused by economic difficulties, such as industries closing down, or a neighbourhood’s bad reputation.

Research conducted in Denmark in 2008 indicates that when an area’s reputation is in decline – such as higher rates of crime – many residents can leave the particular neighbourhood.

However, higher rates of owner-occupation can reduce the effect. Liverpool City Council used this method to improve the problem by selling off derelict houses for just £1 each. If the properties are renovated to a decent standard, the council believes that affected areas will be regenerated.

But what can other councils do to address the problem?

Councils in England can charge property owners 50% extra in Council Tax if their properties are left empty for two or more years. Although this will deter many, it still won’t discourage the wealthiest investors.

Councils also have the power to serve a compulsory purchase order, applicable if officials can prove that they have tried to encourage the owner to bring a property back into acceptable use.

However, compulsory purchase orders are regarded as a last resort.

Thus, in 2006, the Labour government introduced Empty Dwelling Management Orders (EMDOs), allowing local authorities in England to take over the management of residential properties that had been empty for at least six months, if there was no reasonable expectation of them being occupied in the near future.

By 2011, just 64 applications had been made and 43 granted. The coalition government then changed the law so that a home had to be empty for at least two years before an order could be served. It believed that the law was undermining property owners’ rights.

The properties also had to be proven attractions for vandalism, squatters and other forms of anti-social behaviour. These restrictions were implemented in 2012.

The lack of homes on the market is causing councils to become more eager to work with property owners of vacant properties to create stock.

The amount of long-term empty properties

Region

 Number of homes

Number recorded as long-term empty
North East 1,196,943 16,052
Yorkshire and the Humberside 2,357,866 27,058
North West 3,193,675 40,461
East Midlands 2,014,514 19,490
West Midlands 2,413,862 22,257
East of England 2,590,719 17,202
London 3,470,247 20,795
South East 3,768,624 23,956
South West 2,457,713 18,550
Total in England 23,464,163 205,821

The National Housing Federation (NHF) calculated that 974,000 homes needed to be built between 2011-14. However, data from 326 councils revealed just 457,490 were completed. Homelessness charity Shelter insists that the country must focus on boosting construction.

However, Williams argues that the UK’s empty housing, whether old and neglected or new and purposely vacant, should be utilised more comprehensively.

Unoccupied homes could be “transformed into new homes for people in search of decent housing at a price they can afford,” she adds. “Creating new homes from empty properties should go alongside building new homes to address housing needs.”1

The Department for Communities and Local Government found that the amount of empty properties is “at its lowest since records began” and that over 100,000 long-term empty homes have been brought back into use since 2010. It adds that the Government offers councils the same financial rewards for bringing unoccupied homes back into use as it does for building new homes.

A spokesperson says that ministers are committed to “helping anyone who works hard and aspires to own their own home to turn their dream into a reality”1.

During the summer, Islington Council granted itself powers to prosecute owners of new build homes that are left empty for longer than three months. Property owners could be fined, sent to prison or have the property seized. However, this will not apply to existing buildings, such as the Bezier.

A spokesperson for the Bezier’s developer, Tudorvale, insists that the units were sold in good faith to people who “worked hard”1 to buy the homes, adding that they do not understand why investors leave apartments empty.

Pryor concludes: “The number of potential homes affected by buy-to-leave isn’t huge in a city the size of London, with a housing stock of several million. But as a percentage of new-built properties, the ones intended to help deal with the housing crisis, they account for quite a significant percentage. It’s about whether property is regarded as a home or an asset.”1 

Have you ever left a property empty and why?

1 http://www.bbc.co.uk/news/magazine-34930602

 

 

 

 

 

 

 

 

House Price Forecast for 2016

Published On: December 4, 2015 at 4:35 pm

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UK house prices are set to rise by between 4%-6% in 2016, as growing affordability issues and the chance of an interest rate increase slow the property market, according to Halifax.

The mortgage lender found that demand for homes has risen in recent months, but the amount of properties coming onto the market has remained at a record low.

Surveyors and property portals have seen a shortage of homes for sale, which is pushing up prices. They report a vicious circle, as prospective vendors wait until there are more homes up for sale before putting theirs on the market.

The Halifax report is the first 2016 forecast to be published by a major lender. Its Housing Economist, Martin Ellis, says there is little reason to expect the trend to change in the coming year.

House Price Forecast for 2016

House Price Forecast for 2016

“As a result, the substantial imbalance between supply and demand is likely to persist, maintaining upward pressure on house prices in 2016,” he adds. “On average, UK house prices look expensive compared to incomes, but valuations are supported by the low levels of property for sale, low levels of house building and exceptionally low interest rates.”

However, Ellis does expect growth to drop from its current level.

Halifax’s latest monthly house price index put the average property value in the UK at £205,240, a 9.7% rise on the same period last year.

For next year, Ellis says national growth is expected to slow to between 4%-6%, adding more than £12,000 to property prices at the top end of the market.

In London, he predicts the slowdown will be sharper. House price growth in the capital has already eased since autumn last year, when Halifax’s index put the average annual increase at 21%. This autumn it fell to 13% and Ellis expects growth to drop to single figures in 2016.

He says the national decline will be fuelled by continuing affordability problems, which have caused prices to rise the equivalent of 5.31 times average earnings in the UK and those in London hitting a record high of 7.96 times wages. And despite mortgage rates sitting at new lows, buyers must save much larger deposits to secure a loan.

He states: “With house prices continuing to increase more quickly than average earnings, it is increasingly difficult to get on the housing ladder.

“This ongoing development, combined with the growing prospect of an interest rate rise, should start to put the brakes on house price growth during the course of 2016.”

Halifax’s monthly data is based on mortgages it agrees each month, adjusted to reflect the sale of an average home. Rises have surpassed the 3%-5% predicted by the bank a year ago, the result of interest rate rises being postponed, the continued decrease in the cost of mortgages and a lack of supply.

Further into the future, Halifax expects growth to sit fairly in line with earnings, which have started to pick up recently. However, much will depend on whether the Government fulfils its promises to build more homes.

Ellis says: “Levels of house building remain well below those required to keep up with the pace of household formation, but we do expect improvements over the medium term. An upward trend in house building would help to bring demand and supply into better balance, helping to constrain upward pressure on house prices.”1 

Halifax’s forecast for next year is in line with the prediction released by the Office for Budget Responsibility (OBR). It expects growth of 4.8% in 2016, followed by a similar rise in 2017.

However, the OBR says changes to landlord taxes added uncertainty to its predictions. In April, buy-to-let investors and second home buyers will be charged an extra 3% in Stamp Duty. Read more here: /16883-2/

The changes could cause a rush in activity before the hike is introduced, pushing prices up in the short term.

1 http://www.theguardian.com/society/2015/dec/04/uk-house-prices-set-to-rise-further-as-demand-outstrips-supply

 

Government announces Cutting Red Tape Review

Published On: December 4, 2015 at 4:30 pm

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House builders in Britain have been encouraged to have their say on the amount of red tape that is seemingly restricting them from constructing more properties to satisfy demand.

The Government has announced a Cutting Red Tape review, which aims to identify and address the biggest issues that are effecting house builders. In addition, it wishes to collate the views of lesser firms, to understand the pressures that they are under.

Minsters believe that the wide-ranging investigation will cover experiences of those involved in building homes, such as developers, planners and associations.

Voice

Business Secretary Sajid Javid said that the review, ‘will give house builders and smaller construction businesses a powerful voice as part of our £10bn deregulation drive. Where rules are too complicated, ineffective our poorly enforced, I want to hear about it and the Government will take action. Together we can cut red tape and get Britain building.’[1]

Housing Minister Brandon Lewis also said that he is committed to removing barriers experienced by home builders. Lewis said that, ‘we want to hear the views of firms big and small so we can remove unnecessary red tape and help house builders do what they do best, building the homes we need.’[1]

Mr Lewis went on to explain that the starting points for the review are based on priorities recommended by the Task Force. These include:

  • roads and infrastructure rules for new housing developments
  • EU rules, such as the Habitats Directive
  • Wider EU environmental permit rules
  • Rules affecting utilities such as electricity, gas and water
Government announces Cutting Red Tape Review

Government announces Cutting Red Tape Review

Right to listen

John Allan, a national chairman of the Federation of Small Businesses, belives that the Government is right to listen to the requirements of smaller organisations. ‘In the 1980’s, smaller house builders delivered around two thirds of our new homes. Today, it is less than a third. If the Government can encourage small firms back into house building, that would be a major step towards meeting this country’s housing needs,’ he noted.[1]

‘The new Cutting Red Tape review will look at the way the law is enforced, as well as whether the rules themselves are proportionate and fit for purpose. The responses from house builders will lead to government taking concrete steps to remove burdens on business,’ he added.[1]

Stewart Baseley, executive chairman of the Home Builders Federation was also encouraged by the move. He said, ‘as the industry looks to drive further increases in housing supply we welcome moves to reduce unnecessary regulation and the associated costs.’[1]

‘Aside from the planning system there are significant other regulatory processes and charges levied on the industry that can adversely affect viability, but also, critically, delay the ability of home builders to get on site and start building. Reducing red tape will bring more sites into play more quickly and so help the industry deliver more desperately needed homes in the coming years,’ he also observed.[1]

[1] http://www.propertywire.com/news/europe/uk-builders-red-tape-2015120411281.html

 

 

Have a Cosy Christmas in One of These Comfy Cottages

Published On: December 4, 2015 at 3:21 pm

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Maybe you can’t decide which family member’s home to spend Christmas at, or perhaps you’d like to change things up and go away for the festive season. If you’d like something a bit different this year, take a look at these holiday cottages for some inspiration!

Whether you find a last-minute booking or get organised for next year, make sure you have a cosy, warm and comfortable Christmas.

Have a Cosy Christmas in One of These Comfy Cottages

Have a Cosy Christmas in One of These Comfy Cottages

Perfect for the whole family

If you have a large family and enjoy spending the holidays all together, this Victorian manor house is the perfect place for you to celebrate. Sea Valley Regent House sits within 55 acres of beautiful Cornish countryside. It is close to Looe and sleeps 18 people. But don’t worry; you’ll all have plenty of space within its 7 bedrooms. The spacious property has sea views and an indoor heated swimming pool for the whole family to enjoy.

A romantic retreat

If something a little more low-key is what you’re after this Christmas, why not head to Beudy Bach in Lampeter, Wales to enjoy some peace and quiet at this converted 18th century cowshed? The cosy retreat has everything you’ll need – from an AGA for rustling up some hearty grub to a TV and DVD player for snuggling up and watching a festive film. And as if this isn’t romantic enough, guests can also enjoy the wood-fired hot tub – wow!

Something a little different 

If you’ve done the whole Christmas cottage thing before, then why not embark on a family adventure to Edinburgh? Spend your holidays at the Belle Boatique, which is permanently moored at the Lochrin Basin. The houseboat has two bedrooms and sleeps four, so why not enjoy a festive trip up to Scotland with your partner and children?

Fairytale Christmas

Christmas always looks better on films – no stress, no cramming members into your home, no clearing up to do – so why not treat this year like a fairytale in this quirky home? The Old Palace Apartment was once part of the great hall at the Old Duchy Palace in Lostwithiel, Cornwall. A grand, but still cosy and pretty property, head here as a family (the apartment sleeps 6) or with a group of friends and forget about the world outside.

The traditional escape 

If the idea of curling up in a fur throw in a wooden lodge is your idea of the perfect Christmas, fear not – you do not need to head to Scandinavia to enjoy a traditional holiday! Check out Wonham Waters in Dulverton, Devon. This charming log cabin sleeps five and sits within 100 acres of untouched woodland – it doesn’t get more cosy than this.

Are you heading away for the holidays? Or maybe you would like to rent out your property for Christmas? Look at these festive homes for inspiration – which is your favourite?

Are shares now a better investment than buy-to-let?

Published On: December 4, 2015 at 3:06 pm

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Categories: Finance News

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With the industry still reeling from George Osborne’s latest tax hikes on the buy-to-let market, many landlords are set to feel the pinch more sharply in the coming months.

Following the Chancellor’s cut to mortgage interest relief, the move announced in last week’s Autumn Statement to introduce a 3% rise in Stamp Duty has left many investors thinking of selling up.

This increase will see an additional £7,500 added onto the typical costs of purchasing a home worth £250,000. The two blows forced upon the sector in quick succession have lead many to question whether buy-to-let is going to head towards an irreversible slide.

Over the past twenty-five years, the average property price has risen from £68,823 to £202,689, an increase of 295%. During the same period, the FTSE All Share has grown at a rate of 9.6% per year.

Considering the latest hits on the buy-to-let market, could investing in shares now be more profitable than investing in property?

Buy-to-let

The Daily Mail has constructed an investigation that looks further into the profitability of both buy-to-let and stock market investment. For both types of investment, the newspaper has a fictional £50,000.

This will obviously equate to a 25% deposit on a property worth £200,000. This loan size can secure a five-year fixed-rate mortgage at 3.59% with specialist lender Accord. With buy-to-let mortgages usually being interest-only, mortgage broker London & Country suggests that with this deal, interest payments would amount to £449 per month over 25 years, totalling £5,385 per year.

Mortgage fees will also need to be added, which in this case would amount to £2,625. However, the extra stamp duty tax, which comes into effect on April 1st 2016, must also be factored in.

Under the changes, the property investor must pay 3% on the first £125,000 of the value of their accommodation, compared to nothing at present. For properties with value between £125,000 and £250,000, a 5% tax is being enforced, as opposed to the previous 2%.

Other costs

In addition, there are also other associated costs to add. These include:

  • Legal fees, averaging £1,200
  • A home-buyers report, totalling £500
  • Standard Valuation, worth £250

These features total £12,075 and more often than not, need to be paid upfront. This means that an investor needs to find £62,000 in order to invest £50,000 directly into a property. If not, this will leave just £38,000 left for a deposit, which ultimately will mean taking on a smaller mortgage.

This is where buy-to-let can get a little confusing for would-be landlords, as there is a further test that must be passed in order to get a mortgage.

A bank will only lend to buy-to-let landlords if the rent that is to be potentially made on the property is 25% more than the mortgage payment. However, the rate of mortgage interest usually used by banks is higher than the one eventually paid, to give themselves more insurance. In the Daily Mail’s example, the rate used is 5.24% instead of 3.59%.

To this end, if the house worth £200,00 was to be purchased, a landlord would need to make £820 in rent.

Passing this test however is not the end of the costs. Aspiring landlords will need buildings and contents insurance, which averages at around £200 per year. Of course, there are then the generic running costs attributed to maintaining a property that also need to be seriously considered and budgeted for.

Tax must also be taken very seriously, with any profit made on a buy-to-let investment being taxable as if it was an income.

Are shares now a better investment than buy-to-let?

Are shares now a better investment than buy-to-let?

Mortgage interest tax relief

There is good news for landlords with some running costs being deductible from any profits. At the present time, this includes mortgage interest at whatever the highest rate of tax stands at. From next year though, tax reliefs are to change.

In the period between April 2016 and 2020, the amount of mortgage interest that is able to be offset against the higher tax rate will be lowered to the basic rate of just 20%. In essence, this means profits will be reduced as tax bills will rise. Using the £200,000 home as an example, the expected income will be £10,200.

Under the new regulations, to calculate the initial tax bill, landlords will have to work out 20% of the total income-in this instance £2,040. A higher rate taxpayer will be charged 40%, so £4,080. In both cases, a basic-rate tax relief of 20% on the mortgage interest of £5,385 will be calculated, amounting to £1,077.

This is then to be deducted from the first amount, depending on the tax rate. In turn, this will leave a tax bill of £963 for a basic-rate payer and £3,003 for higher-rate.

Finally, this and the mortgage interest that has been paid in the year must be deducted from the overall income. For this example, this will leave a total income after tax of £3,852 for a basic-tax payer or £1,812 for a higher-rate payer.

Will more expensive house prices lead to more money?

One of the most attractive features about property investment is the fact that prices can soar. The Daily Mail uses annual growth of 5% for its assessment of how much the original property value of £200,000 could rise. It says that over the term, the property will be worth £677,271.

If the property owner decides to sell the home at the end of the term, they would once again face bills. Firstly there would be estate agent fees, which average around £7,000. Next, the mortgage must be repaid and deposits taken back. This would still live a profit of £470,271.

Tax is still to be taken. When selling a second-home, capital-gains tax must be paid and for a basic-taxpayer, this stands at 18%. For a higher-rate payer, this rises to 28%. Everyone, regardless of tax band, can cash in gains on £11,000 per year before incurring Capital Gains Tax.

18% tax on £459,271 would deduct £82,669. A higher-rate tax-payer would have £128,595 deducted in tax.

Are shares now a better investment than buy-to-let?

Are shares now a better investment than buy-to-let?

Shares

Stocks and shares, are, in essence, much simpler. Putting money into the stock market secures a regular income in the form of dividends. Investing £10,000 in the FTSE All Share 25 years ago would now lead to having £84,630 in the bank.

Arguably the most tricky part of investing is choosing which stocks and shares. This is why it is very important to choose an income fund where an experienced fund manager can make the vital decisions.

The Daily Mail’s example takes both a £50,000 and £62,000 sum, the same as what has been hypothetically invested into buy-to let. The paper also uses an example of cash that has been saved in an ISA, meaning no income or capital gains tax would have to be paid.

Investing in the stock market comes without any upfront costs, if done through a DIY investment platform or fund supermarket. There is however an annual charge to invest in a fund, normally as little as 0.80%.

Taking the same conservative growth as for the buy-to-let investigation of 5% for the next 25 years, the newspaper suggests that the funds will pay an average income of 3.5%. Therefore, after 25 years, punters would have paid around £26,640 in fund charges and fees. However, a total income of £65,141 would have been secured-more than the £45,300 received as a higher-rate tax-payer in buy-to-let.

This said, a 5% per year, investment will now be £127,098-resulting in a profit of £77,098. On a £62,000 investment, income would be £108,137 after the period, with capital worth £158,091. This means a total return of £266,228 would be returned after 25 years.

So what is the best form of investment?

Obviously, the total profit for buy-to-let investment looks far better. Even on a £62,000 upfront investment in shares, total profits are £386,976 less than the example cited by the Daily Mail.

The paper suggests this is down to gearing. This means that an investor borrows money (mortgage) in order to invest. As such, if prices are to increase, gains are bigger to start with.

However, investing in the market can be very risky, because if prices were to dip, investors could be faced with owning more than what they borrowed.

Another factor to consider are rising interest rates. Should buy-to-let mortgages increase during the long-term, this will have an effect on overall profits.

Investing in stocks and shares, though less profitable, is much more hassle-free. Buy-to-let could amount to being a full-time time, so investors must consider at length before taking the step to buy a property.

Letting agents, though taking some of the load, also take cash for their troubles. An average letting agent takes 10% of what is made in monthly rent. Void periods must also be considered.

In terms of investing, returns can be hiked by not taking an income. This means that dividends would be reinvested each year, so growth would be seen on that extra cash. The Daily Mail indicates that this would leave £319,957 over the 25 year period.

To conclude, despite the volatility surrounding increasing stamp duty and interest rates in the near future, buy-to-let remains at present, more profitable than the stock market. However, investors must be ready for the long-haul in order to make their investment pay.[1]

[1] http://www.dailymail.co.uk/money/investing/article-3341827/Are-shares-better-bet-buy-let-Osborne-s-latest-attack-landlords-property-FAR-lucrative.html