May

KERCHING? Buy-to-let outperforms stocks, bonds and gilts over past 10 years

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Buy-to-let property delivers better returns than stocks, bonds and gilts over a 10-year period, according to new research.

Analysis by AJ Bell reveals that the best stock deal would pocket investors £31,833, gilts and bonds produces £23,693, while those who choose to keep their cash in savings would see an even poorer return of just £3,082.

On the other hand, Private Finance reports that a landlord investing £50,000 would make a profit of £54,106 from rent, plus a further £39,079 from capital growth, delivering a total profit of £93,185 over 10 years.

The world’s markets have been highly volatile since the start of the pandemic, suffering losses in the trillions of dollars.

They took another major nosedive when Russia invaded Ukraine and the resulting fuel wars and uncertainty have caused stocks and shares to continue under-performing this year.

Quit

However, the buy-to-let sector presents its own challenges, as rising costs, tax changes and potential regulatory changes are prompting growing numbers of landlords to quit.

Nine out of ten landlords expect rising interest rates and inflation to have an impact on the cost of maintaining their property investments, according to recent research from GetGround, which found that more than half of landlords expected costs to jump between 25%-50%.

Daniel Jackson, sales director of Sequre Property Investment, believes Covid has prompted a revival in buy-to-let market investment thanks to Rishi Sunak’s stamp duty holiday, steadily rising average rents levels, increasing property values and low mortgage interest rates.

“This trend is likely to continue with house prices predicted to rise steadily through 2022 and rental yields achieving more than 8% in some parts of the UK, particularly the Midlands and North East and West,” he predicts.

“These statistics show what we and our investors have always known – that long-term property is a far stronger and more resilient investment than other asset classes.”

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