Property investors positive about the future - Emerging Real Estate

Property investors positive about the future

08/10/2011

 Property Investors positive about the future

77% of UK property investors are thinking of buying additional investment properties over the next 12 months, according to a new survey of the Assetz investor database.

Investors have listed strong rental demand as their main incentive for expanding their portfolios, followed by high and increasing rental values, and thirdly the belief that prices are at or near the bottom. Just 10% of investors questioned believe that now is a bad time to invest in UK buy-to-let, with the majority mentioning concerns about the economy as the main deterrent. 

Assetz says that investors are taking a long term view of the property market, with 50% saying that long term capital gain is their top priority, closely followed by rental income (44%). Only 6% stated that they were hoping to benefit from short term capital gain.

 46% said they are currently achieving gross rental yields of more than 5.5%, with 19.% achieving 9% yields or higher.

 Assetz has seen sales of UK investment property more than double in the last 12 months and predicts it will expand at least 50% again over the next year.

Stuart Law, chief executive of Assetz, said: "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."