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Buy-to-let is a ‘lucrative business’ that continues to appeal to investors

Residential property is currently the best long-term investment when compared to all other asset classes, according to buy-to-let investors.

Benham and Reeves surveyed more than 5,000 buy-to-let investors on everything from the current volatility of buy-to-let investments, confidence in the market, the impact of Brexit, other government changes to the industry and short and long-term investment intentions.

The research found that 73% of those asked considered the sector to be the best, least volatile long-term investment.

But in the wake of a number of government changes to the sector, many investors are understandably more cautious about investing in property.

Changes to property and investment laws on the horizon are proving particularly problematic, with 80% of those asked admitting to being unfamiliar with the latest changes to the buy-to-let market. 

Opinion is divided over changes to buy-to-let tax relief and whether the sector still provided a good investment as a result, with 49% believing it is and 51% no longer sure.

However, with buy-to-let always requiring a long-term investment outlook, this increased to 37% of investors feeling very confident that they will see an adequate return over the next ten years, with a further 6% stating they were extremely confident and 51% not as confident. 

Some 83% of investors stated it was either unlikely or very unlikely that they would sell their property over the next year, with the majority (58%) staying put for five years. 

But with market uncertainty still hanging over the sector, just 21% of investors would consider investing in a property in the next 12 months, although half of those asked would consider expanding their portfolio within the next five years. 

Director of Benham and Reeves, Marc von Grundherr, said: “The government has really gone to war with buy-to-let investors of late and a consistent string of detrimental changes to the sector through stamp duty increases, tax relief changes and a ban on tenant fees has had the desired impact of denting industry sentiment and dampening appetite for future investment due to a reduction in profitability. 

“However, for the institutional buy-to-let investor, this is but a mere blip on a much longer timeline and the overwhelming overtones are that while Brexit poses a challenging obstacle for the immediate future, the market remains the investment option of choice with many confident on a return further down the line. 

“This is a testament to the durability of buy-to-let bricks and mortar in the UK as, despite a government-backed clamp down, it remains a lucrative business and one that continues to gain the backing of those that are on the frontline.”

Poll: Do you still consider buy-to-let a ‘lucrative business’?

PLACE YOUR VOTE BELOW

  • Paul Barrett

    Lucrative hardly!!
    The bog standard AST letting business model is hardly lucrative!

    S24 being the main reason why a decent yield is all but impossible especially in the SE.

    Cash rich LL are OK but then they always were.
    50% of the PRS relies on mortgages to provision that 50%.

    The threat of a Labour Govt with all their bonkers policies makes BTL a very risky prospect.
    Such a threat is sufficient to make me start to sell up.
    The PRS is hardly lucrative!


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    Agree entirely Paul.
    The threat of a Corbyn led government would be enough to send anyone with assets into heart failure.
    Let's hope that the electorate are wise enough to see that their policies would be a disaster to the economy, unless you are welfare dependent of course!!
    Prices in my area have risen around 30% in the last year or so, mainly down to buyers from Bristol, taking advantage of the relatively low cost of housing and the abolishment of the bridge fee.
    From a BTL perspective, it is not so good, as despite the rise in house prices, rents have remained stagnant, which, at todays prices, wouldn't return a very good yield.

     
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