Despite recent tax and regulatory changes, investment in buy-to-let has outperformed most other major asset classes over the past 10 years, when considering the annual gain in house prices along with the increase in rental yields, new research shows.
An investment in the buy-to-let sector a decade ago would have brought a 92% return today, according to the research from VeriSmart.
The combined letting inventory and property compliance specialist found that investing in the FTSE 100 would have brought the biggest return when considering the annual capital gain and the percentage yield with an increase of 119%, whilst the value of classic cars is up 94% during the same time period. A buy-to-let property is a very good ‘next best option’, when considering capital growth and the increase in rental returns.
The return offered by buy-to-let is significantly higher than the 60% return that investing in gold would have brought and a world away from the 16% increase in cash or the -4% drop in fine art.
It is also important to note that the growth in the property market has been by far the most reliable option with the FTSE 100, gold or cash providing a far more volatile option that is also open to a larger degree of impact from political and economic factors as well as influence from other foreign countries.
Jonathan Senior, founder of VeriSmart, insists that bricks and mortar remains one of the best and most stable investments available in the UK.
He commented: “Last week’s spring statement was a missed opportunity for the Government to backtrack on their previous attacks on the buy-to-let sector, attacks that have done little to solve the UK housing crisis and if anything, have caused further restrictions in the level of suitable stock while keeping rental prices buoyant as a result.
“However, the buy-to-let sector remains the backbone of the UK property market, helping to support aspirational homeowners as they work to overcome the sometimes impossible financial barriers of homeownership. The need for this support is clearly evident as it remains one of the most lucrative investments one can make.
“With little being done to address property supply or affordability on a meaningful scale, this is likely to continue going forward and despite the Government’s best efforts there will always be demand for a good, honest landlord providing above the board accommodation to those that need it.”