Buy-to-let is seen as a safe haven

Buy-to-let is increasingly being seen as a safe port in a storm, with investors worried about the impact of the rapidly slowing Chinese economy and the sluggish eurozone on the UK.

Buy-to-let is seen as a safe haven


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.”

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  • Leitmotif

    Buying at the peak of a mega-bubble – really sensible

  • David

    New entrants, even existing ones, must look to gross yield and be very aware of the tax consequences of Clause 24. Osbourne and Gaulke would be guilty of missseling the r”estriction of interest rate to the basic rate” con jobe if they were financial advisers. From 2020 a BTL investor has a tax bill calculated o the rent net of none finance expenses i.e. turnover and only gets a RELIEF against that tax bill. In many cases that could, will, result in landlords having a large tax bill but no actua cash to meet it. Clause 24, the fight is not over.