BTL a better investment than the stock market?

With the buy-to-let market still surging and with more mortgage plans on offer than ever before, it seems little surprise that this is proving more popular than investing in the stock market.

New research from Nationwide Building Society reveals that in excess of two million people are currently private landlords, an increase of 600,000 since the financial crash.

Rises

Data shows that the average cost of a home in Britain in April 1991 was £53,677. In the next 24 years, prices have increased by almost 260% to bring the average property price to £193,048.[1]

In the year 2000, less than 2% in mortgages in the UK were for buy-to-let. Today, there are 900 BTL mortgages available, which account for 15% of the total number of home loans. Buy-to-let mortgages account for 18% of new mortgages.[1]

Managing Director of Property Let By Us, Jane Morris, commented, ‘our own research shows that for 20% of landlords, their property portfolio forms part of their pension provision and for 70% of younger landlords, it is their only pension fund.’[1]

Morris feels that, ‘many people still prefer property as a sensible way of saving for the future because, unlike pensions, with bricks and mortar your money isn’t locked away until you reach the age of 55.’ She continued by saying, ‘excellent rental yields and capital growth from buy-to-let is appealing to any investor who is concerned about the volatility of the stock market.’[1]

BTL a better investment than the stock market?

‘Despite the additional costs in property such as buying fees, maintenance and void periods, the asset growth and rental income is still very attractive for investors concerned about the volatility of stock markets. However, as with any investment, there are no guarantees, so investors should be aware of the potential pitfalls,’ Morris concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/is-btl-better-than-stocks-and-shares-for-retirement.html