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Research by VeriSmart, the UK’s only combined lettings inventory and property compliance specialists, has looked at just how lucrative the UK buy-to-let market has been in the 10 years since the financial crisis when compared to other investment options like the FTSE 100, classic cars, gold and fine art.
VeriSmart looked at the return on each investment and how each market has performed over the last 10 years with the research showing that buy-to-let property is up there with the FTSE 100 and classic cars when it comes to a sound investment.The research shows that in the last 10 years: -
Investing in the FTSE 100 would have brought the biggest return when considering the annual capital gain and the percentage yield with an increase of 119%, whilst the value of classic cars is up 94% during the same time period.
However, for those that aren’t professional investors or that don’t have the garage space for a fleet of classic cars, a buy-to-let property is a very good ‘next best option’ and, when considering the annual gain in house prices along with the increase in rental yields, an investment in the sector a decade ago would have brought a 92% return today.
This is much higher than the 60% return that investing in gold would have brought and a world away from the 16% increase in cash or the -4% drop in fine art.
It’s also important to note that the growth in the property market has been by far the most reliable option with the FTSE 100, gold or cash providing a far more volatile option that is also open to a larger degree of impact from political and economic factors as well as influence from other foreign countries.
While classic car investment sits ahead of property, that too is made or broken on the car itself rather than the overall market and while a nice art collection may brighten your walls, it is also harder to find a buyer for – even when compared to the current Brexit property market slowdown.
All things considered and despite successive Chancellors hitting the buy-to-let sector with numerous legislative penalties including an increase in stamp duty, a reduction in high rate tax relief for landlords and a higher rate of capital gains tax on residential property profits, UK bricks and mortar remains one of the best and most stable investments available.
Founder of VeriSmart, Jonathan Senior, commented:
“Last week’s spring statement was a missed opportunity for the Government to backtrack on their previous attacks on the buy-to-let sector, attacks that have done little to solve the UK housing crisis and if anything, have caused further restrictions in the level of suitable stock while keeping rental prices buoyant as a result.
However, 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.”Do you concur with this research? Do you have any other investment types other than BTL and how have they performed for you?SEE ALSO - Cash increasingly looking like king in BTLUP NEXT - Have we been keeping House prices UP 2007DON'T MISS - Video - "Is BTL yesterday's investment?"NOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Can you share links to where this data originates from (eg - where on the Land Registry is this info / table?)
That is a interesting question, as while the Land Registry does tell us prives properties were sold for and when. They do not split them down into Residential or Buy-to-Let.
_________________________________________________________________________My posts are not financial advice, just a rambling guy passing time on a coffee break.The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance._________________________________________________________________________
Owning shares requires no work
BTL requires work
classic cars for more fun than the above
And property is usually a GEARED investment ( using a mortgage, £50k gets you a £200k house) so whether it goes well or goes badly the results are magnified. That can increase reward or increase risk which means it can be great or a nightmare so needs your FULL attention. More like a job than just an investment.
Interesting if simplistic comparison
Many BTL investors will have done much better
And at @ 75% LTV the return £4£ is 368% so BTL is the winner by a country mile
Jonathan Clarke. http://www.buytoletmk.com
Yes. Gearing is key as it allows folk without much money to see great returns. You won't easily borrow to buy shares
'classic cars' is like saying 'property' - there are so many types, definitions etc. etc that you cannot just lump them in together like that.
You can get £1 cars and £1 houses, £1million cars an £1million houses. Are they the same type of asset? Well, cars usually have 4 wheels and houses 4 walls and a roof but those are the only real similarities.
Will the £50 classic car I looked at today ever be a £1million classic car? Nope!
BTL is really the best option for investment, proved by this statistics. Well, may be one of the hardest one as well, but it is worth work on it.
It’s great with a mortgage. Take that out of the mix and the numbers speak for themselves...
Clearly there are better yielding strategies:
Renovate to let
But gearing is the key. But I think this risk is acceptable compared to equities where you cannot control anything (or very little) and volatility is much higher.
I’ll take a lot of property, a few shares and a Porsche 956.
Totally in fair comparison
BTL takes effort it dosent just happen
all the others you pick your investments and sit back
BTL has advantage of leverage you only put in 25% and buy a high yeilding property and you make money
also no mention of taxation if the 100k was in an isa there would be zero tax to pay and that would make me 40% better off with the isa
the key to this topic is spread it around buy gold buy stocks and shares and buy BTL for cashflow and a bit of work
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.