Figures from a buy-to-let firm suggest that a growing number of investors are entering the market in order to secure income for their retirement.
In its yearly Buy to Let Investor Survey, Assetz found that 65% of investors decided to enter the market to subsidize their pension. 27% said that long-term capital growth was their motivation, as opposed to just 8% who suggested short-term investment as their reasoning. [1]
The survey indicates that confidence in the rental market is stable, with more than seven in ten investors indicating that they plan to add to their portfolio during the next 12 months.
Of these potential investors, the majority, 55%, said that they would aim to buy their property either with cash, or by taking out a small mortgage. This enables them to not face the problem of obtaining finance, which is an issue encountered by would-be homeowners. 23% said they would generate cash by refinancing their home/property in their existing portfolio, while 22% stated that they would use a high loan-to-value loan.[1]
Investors Believe Property is Better than Pensions
Just 5% of landlords feel that it is not the correct time to invest in property. Of this minority, some said that they could not secure a mortgage, while others cited worries with tenant finances as the main reason not to invest further.[1]
Encouragingly, 68% of landlords surveyed said that they are achieving returns of more than 6% on their investment, with a fifth managing 9% or more.[1]
[1] http://old.lettingagenttoday.co.uk/news_features/Property-better-than-a-pension-say-investors