Buy-to-let returns enticing half of UK homeowners

Buy-to-let returns enticing half of UK homeowners

Property remains the most attractive investment asset due to increasing returns in comparison to falling profits with other assets.

Summary:

  • Homeowners increasingly want to buy-to-let when compared with stocks, shares and government bonds
  • Forthcoming tax relief changes aren’t deterring existing landlords from investing in with BTL mortgages
  • The UK is an attractive global investment location due to the instability of other regions

Half of homeowners are now considering renting their property as returns on other assets decrease.

Volatility of the stock market and shares has led to 30% of investors citing they are more likely to invest in property, according to research by Bank of Ireland UK.

An incredible 70% of British homeowners believe a buy-to-let property would outperform all other forms of investments long term, including shares, cash and government bonds.

Three-quarters of existing landlords say that changes to tax relief will not affect their attitude towards property investment. The amount of tax higher rate landlords can claim back will be reduced on a gradual basis from 40% beginning in April 2017 to 20% in 2020.

This is a view similar to savers, who believe investing in property is more profitable than workplace pensions, despite tax relief and employer contributions.

Scoring 61.4 on the Bank of Ireland UK’s buy-to-let index, where scores in access of 50 indicate a strong future, the market for property investors continues to look optimistic.

Mark Howell, Director of Marketing & Customer Management, Bank of Ireland UK Mortgages, said: “Confidence in the buy-to-let market remains robust, despite news stories in the press which might have suggested otherwise. It is a sign of the current economic climate that many are seeing this as a prime investment.”

Just under a third of British landlords noted that the property market troubles in China and the Eurozone gave them further reason to invest in a stable and secure economy. This rationale is evident across the globe, including countries such as Singapore, where investors are choosing to look at the UK market for higher guaranteed returns.

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