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Intermediaries should embrace buy-to-let, says new report

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Edinburgh based Grant Property Investment has welcomed a new report that highlights the strength of buy-to-let property when benchmarked and compared over an 18 year-period for performance against other asset classes.

The report ‘Buy-to-Let comes of age – eighteen years of investment performance data on buy-to-let and other major asset classes,’ by Rob Thomas, Director of Research at The Wriglesworth Consultancy ‘examines how buy-to-let investors who purchased in 1996 have fared relative to investors in cash, gilts equities and commercial property.’
 
The report’s findings support Grant Property’s long-held view that property should be considered as part of a client’s balanced portfolio. With 20-years track record working in partnership with intermediaries and having helped source over 2,000 properties across 12 UK cities, Grant Property is optimistic that the market will realise its expectation this year to increase in value by a further 3-5 per cent and achieve rental yields of between 6 per cent-8 per cent. 
 
Produced in April 2015 and supported by 18 years of data, the Landbay sponsored report suggests that ‘buy-to-let has been the best performing investment of the past 18 years, providing average returns that comfortably outstrip those of other major asset classes.’  

The report notes that: ‘Every GBP1,000 invested in an average buy-to-let property purchased with a 75 per cent loan-to-value (LTV) mortgage in the final quarter of 1996 would have been worth GBP14,897 by the final quarter of 2014, a compound annual return of 16.2 per cent. The same investment in UK commercial property would have grown to GBP4,494 (compound annual return of 8.7 per cent); in gilts (UK government bonds) to GBP3,329 (compound annual 6.9 per cent); in UK equities (shares) to GBP3,119 (compound annual 6.5 per cent); and in cash to GBP1,959 – a compound annual return of 3.8 per cent.’
 
The report also notes that a buy-to-let investor who invested in one mortgaged property in 1996 with an investment of GBP15447 (when house prices average (GBP55,000), would expect to have realised a net income of GBP6427 in 2014 (equating to 41 per cent net income as percentage of initial investment). 
 
Peter Grant, CEO of Grant Property Investment, believes the report’s findings reflect the positivity and continued interest in buy-to-let experienced by his company. Grant says: “It’s very refreshing to read a report that backs-up our long-held belief that investing into prime location, quality buy-to-let property represents a sound investment.
 
“The approach adopted by Grant Property Investment is to work alongside intermediaries to help service the investment needs of their clients. Our tried and tested approach takes the hassle out of residential investment. This includes the sourcing, renovating, letting and management of the property all delivered in one comprehensive package. 
 
“The net result is a process in which intermediaries and their clients directly benefit from our market experience, saving them both time and money.”

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