How good an investment is buy to let property?

Investors are constantly on the look out for the best deals – which is why so many come to the world of property. The simple truth is that no matter what happens, people will always need somewhere to live. This make investing in bricks and mortar an appealing prospect.

How good an investment is buy to let property?

But just how profitable is buy to let property compared to other forms of investment? A new report from VeriSmart shows that property is up there with FTSE 100 firms and classic cars as a good value investment.

By looking at the UK buy to let market over the last 10 years since the banking crisis, the company was able to compare property to other investment options such as gold, classic cars, stocks and shares, and art. When considering both the annual capital gain and the percentage yield, FTSE 100 gave the biggest return with an increase of 119% and classic cars returned 94% over a 10 year period.

Buy to let property has provided a slightly lower 92% return over the same time period. However, property has other advantages over both.

It is hard to be an effective stock market investor unless it is treated like a full-time job. This can be stressful, and it requires a high level of knowledge and skill which the average person likely does not have. Compare this to the property sector where only a minimal amount of knowledge is required, and an investor can have an extremely successful

And whilst classic cars have returned slightly more over the last decade, that type of investment is arguably more precarious. Firstly, a successful investment into cars depends entirely on the make and model of the individual car rather than anything to do with the market. There are only a limited number of the most in-demand cars and no more of them are being built. This is an exclusive club, unlike property.

Secondly, it is much easier to lose a car than a house. Your brand new classic car investment could be stolen or, if you choose to drive it, easily wrecked. Again, this is an issue which does not generally affect something as solid as bricks and mortar.

Regarding other options in the VeriSmart report, an investor would have received lower returns from gold (60%), currency (16%) or fine art (-4%) over the same period. All of these are seen as traditionally strong, but we can see that the returns are nowhere near as impressive as buy to let property.

Jonathan Senior, founder of VeriSmart, says of property: “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.”

This is a great time to invest in UK buy to let property and make the most of the great returns on offer. Property is one of the most profitable asset classes available and it has unique strengths that set it apart from the competition. Have a look at our available investment opportunities today and enquire for more information!

Sheffield Guide vertical - April 2019

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