Buy-to-Let Remains One of the Most Lucrative Investments in the UK

Despite recent tax and regulatory changes, investment in buy-to-let has outperformed most other major asset classes over the past ten years, when considering the annual growth in house prices, along with the increase in rental yields.

An investment in the buy-to-let sector a decade ago would have delivered an average 92% return today, according to research by VeriSmart.

The combined inventory and property compliance specialist found that investing in the FTSE 100 would have brought the greatest return when considering the annual capital gain and the percentage yield, with a rise of 119%. Meanwhile, the value of a classic car is up by 94% over the same period. 

Therefore, a buy-to-let property is a very good next best option when considering capital growth and the increase in rental returns.

The average yield offered by buy-to-let is significantly higher than the 60% return that investing in gold would have delivered over this timeframe, and a world away from the 16% increase in cash or the 4% decline in fine art.

It is also important to note that the growth in the property market has been, by far, the most reliable investment option, with the FTSE 100, gold or cash providing a far more volatile opportunity, which is also open to a larger degree of impact from political and economic factors, as well as influence from other foreign countries. 

Jonathan Senior, the Founder of VeriSmart, insists that bricks and mortar remains one of the best and most stable investments available in the UK at present.

He explains: “Last week’s Spring Statement was a missed opportunity for the Government to backtrack on their previous attacks on the buy-to-let sector, attacks that have done little to solve the UK housing crisis and, if anything, have caused further restrictions in the level of suitable stock, while keeping rental prices buoyant as a result.

“However, the buy-to-let sector remains the backbone of the UK property market, helping to support aspirational homeowners as they work to overcome the sometimes impossible financial barriers of homeownership. The need for this support is clearly evident, as it remains one of the most lucrative investments one can make.”

Senior is confident in the future: “With little being done to address property supply or affordability on a meaningful scale, this is likely to continue going forward and, despite the Government’s best efforts, there will always be demand for a good, honest landlord providing above the board accommodation to those that need it.”