Recent research from Property Partner found that more than a third (36%) of UK investors opted for residential property above cash (27%), government bonds (22%), gold (8%) and commercial property (4%).
“There are increasing signs of nervousness right now and what is very clear is that people look at residential property as a lower risk investment,” said Rob Weaver, director of investments at Property Partner.
“With property prices continuing to rise, investors are keen to place more of their assets into residential as a defensive move.”
This is certainly borne out by the latest figures from the Council of Mortgage Lenders (CML) out today which show that gross buy-to-let lending increased substantially in September and in the third quarter, up by volume and by value in comparison to the previous time period and the same time last year.
This increase in activity was driven by both buy-to-let house purchase and buy-to-let remortgage activity, although remortgage levels showed greater growth.
Looking at the CML data, Weaver said: “The growth in buy-to-let lending underlines the continued confidence UK investors have in this asset class.
“As an asset class, buy-to-let is also benefiting from the growing concern about the state of the global economy. It is seen as a safe port in a storm.
“This fear was underlined yet again this week by the credit rating agency Moody’s, and I suspect buy-to-let as an asset class will continue to benefit as the “global shockwaves” from China ripple out.
“With the Bank of England once again dovish on interest rates, this will represent a further fillip for people turning to bricks and mortar as an investment.”