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Posted on May 12th 2016 by admin-movingin

Buy to let returns exceed those from FTSE-100 despite recent challenges

Original Author: Graham Norwood

Buy to let returns have exceeded those from the FTSE-100 with average gains of 9.6 per cent across England and Wales in comparison to a 3.9 per cent stock market drop.

Analysis by Property Partner – assessing buy to let in comparison to other major asset classes – shows the success of buy to let. This specific analysis is based on cash investors with no mortgages and before tax is paid on rental income. 

The analysis masks regional variations. The highest regional returns were, predictably, in Greater London, where annual returns in the year to March hit 16.5 per cent. 

“Monthly figures can be volatile, but what’s clear is that regional disparities in the housing market are widening, with Yorkshire and Humberside and the north east regions looking fragile” says Rob Weaver, Property Partner’s director.

“Investors are understandably showing caution ahead of the EU referendum. But the fundamentals – high employment, wage growth, cheap borrowing and the chronic shortage of supply – remain in place and are positive.”

However, Weaver makes a warning about the future. 

“The government has changed the whole structure of the UK market, making traditional buy to let far less attractive on paper, particularly for amateur investors buying properties with a mortgage” he says.