Over half of UK investors no longer see property as a good investment.
The finding comes from a survey of over 1,000 investors plus 500 high net worth individuals, and was commissioned by financial firm Rathbone Investment Management, which questioned whether the death of buy-to-let is now being witnessed.
It said that in view of recent tax changes, many investors are now re-evaluating the cost-effectiveness of property as an investment.
The richer investors were more upbeat about property. Of those high net worth individuals surveyed, a quarter owe their fortunes to property. The same proportion, 25%, currently own buy-to-let properties, but only 7% plan to increase their portfolios, and 38% view property as a poor investment.
Robert Szechenyi, investment director at Rathbones, said: “Recent changes to the tax and regulatory treatment of buy-to-let has caused investors to take a step back and assess the viability of these investments.”
“Whilst it’s understandable that property, and in particular residential property, has been a popular investment in the past, it’s now making less and less sense.
“Not only are the returns now being impacted by an increased rate of tax, but they can also prove high risk investments due to a lack of diversification.
“Property investments require a large amount of capital to be held in one single asset and landlords will often hold a number of properties within one region.
“Investors who are looking to invest in property, should make sure to assess their risk appetite, look at all alternative options and make sure this property is held within a well-diversified portfolio of investments.”
Hardly surprising.
Certainly for most of the country real net returns of less than 3% makes BTL more hassle than it’s worth.
Buy a £150k flat and have the potential hassle of tenants, empty periods and expense of prep / replacements, or, throw £150k at solid firms paying dividends?
When it is easy to get the same net return from equities, BTL’s, which require more time, effort and work are never going to be first choice.
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True enough – but what about factoring in longer term capital appreciation? Makes a significant difference to overall yield of the investment.
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Says the firm investing in and promoting alternative asset classes. Seriously?
As long as you can leverage property it will always have a role in a balanced portfolio.
It’s actually a travesty that these investment houses have ignored residential property for twenty years despite the returns.
BTL is dead but meanwhile the country’s largest insurance and pension companies are piling into PRS. Yep, no paradox there.
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It’s ‘official’. – Government policy is Reducing available housing at a time of increasing demand.
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Lets be honest most BTL’s are owned by individuals (or couples) looking to secure their retirement.
Most only have 1 BTL.
This notion that landlords are all ‘Fat cat’ investors milking it is not the case. So when you hit an investment with an additional 9k tax at the start (stamp duty) it is going to put a lot of couples investing off.
Is this going to leave more property for FTB’S? no it does not work like that sadly. The demand far outstrips the supply in the UK.
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Statistically, in the long term, property investment is low risk and has out performed all alternative investment vehicles.
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