Over half of UK investors no longer see property as a good investment.
The finding comes from a survey of over 1,000 investors plus 500 high net worth individuals, and was commissioned by financial firm Rathbone Investment Management, which questioned whether the death of buy-to-let is now being witnessed.
It said that in view of recent tax changes, many investors are now re-evaluating the cost-effectiveness of property as an investment.
The richer investors were more upbeat about property. Of those high net worth individuals surveyed, a quarter owe their fortunes to property. The same proportion, 25%, currently own buy-to-let properties, but only 7% plan to increase their portfolios, and 38% view property as a poor investment.
Robert Szechenyi, investment director at Rathbones, said: “Recent changes to the tax and regulatory treatment of buy-to-let has caused investors to take a step back and assess the viability of these investments.”
“Whilst it’s understandable that property, and in particular residential property, has been a popular investment in the past, it’s now making less and less sense.
“Not only are the returns now being impacted by an increased rate of tax, but they can also prove high risk investments due to a lack of diversification.
“Property investments require a large amount of capital to be held in one single asset and landlords will often hold a number of properties within one region.
“Investors who are looking to invest in property, should make sure to assess their risk appetite, look at all alternative options and make sure this property is held within a well-diversified portfolio of investments.”
Source: Property Industry Eye