THREE QUARTERS OF BUY TO LET INVESTORS PLAN TO EXPAND PORTFOLIOS IN NEXT 12 MONTHS
Over three quarters (76.8%) of UK property investors are considering buying additional investment properties over the coming year, reveals a new survey of the Assetz investor database.
Confidence in the UK buy to let market is robust, with investors highlighting strong rental demand as their main incentive for expanding their portfolios, followed by high and rising rental values, and thirdly the belief that prices are at or near the bottom. Just 10% of investors believe now is a bad time to invest in UK buy to let, with the majority citing concerns about the economy as the main deterrent.
Investors are taking a long term view of the property market, with 50% stating that long term capital gain is their top priority, closely followed by rental income (44%). Just 6% stated that they were hoping to benefit from short term capital gain.
Nearly half of those surveyed (45.9%) said they are currently achieving gross rental yields of more than 5.5%, with almost a fifth (19.4%) achieving 9% yields or higher.
Stuart Law, Chief Executive of Assetz, commented on the research:
“The buy to let market is booming with landlords returning in considerable numbers, encouraged by the excellent rental returns currently available as well as the prospect of long term capital growth if property prices continue to strengthen. UK residential property in the right locations is increasingly viewed as a safe haven, offering investors a long-term, low-risk investment for their cash.
“Risk-averse lenders are making no secret of the fact that they would rather allocate the limited funds they do have to the lower risk option of buy to let loans with deposits of typically 25 – 40%. The sector has not been as hard hit by the recession as originally feared, due to the fact that interest rates have remained extremely low. This has protected landlords by giving them cashflow, and future rate rises, which are likely to be small and gradual, will be covered largely by rental increases.”
Assetz has seen sales of UK investment property more than double in the last twelve months and predicts it will expand at least 50% again over the next year.
