Poor pension provision drives investors to buy to let

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13th December 2012

A stable income and a boost to insufficient pension provision are the two top priorities of buy to let investors wishing to make a new investment over the next twelve months, reveals Assetz in its annual Buy to Let Investor Survey.

Confidence in the UK buy to let market is robust, with three quarters of investors stating that they intend to buy additional investment properties over the coming year, as low bank saving rates and poor returns on the stock market limit income. Only 5% felt that now is not a good time to invest in residential property, the main reasons being the belief that prices have further to fall, difficulties in securing mortgage finance and, thirdly, concerns over the financial security of tenants.

Investors are taking a long term view, with 65% stating that rental income for retirement is their main motivation, followed by long term capital growth (27%). Just 8% cited short term capital growth as their reason for investing.

A large proportion are buying either outright with cash or with a very small mortgage, meaning they are not facing the usual hurdle of securing finance, faced by homebuyers. Over half (55%) stated they will be using a low loan to value mortgage or buying outright, with 23% refinancing their home or an existing buy to let and 22% using a high LTV loan.

Most of those surveyed (68%) said they are currently achieving gross rental yields of more than 6%, with almost a fifth achieving 9% yields or higher.

Stuart Law, Chief Executive of Assetz, commented on the research:

“Investors are very sensibly thinking long term, with their main goal being to supplement their retirement incomes, as annuity rates remain at rock bottom and pension income projections are cut. Those with a lump sum from savings, redundancy or inheritance are looking at what it will pay out in an annuity and seeking alternative options. Many people feel they are familiar with the property market and have faith in its long term growth and stability.

“Finance is still relatively hard to come by and lenders would rather allocate the limited funds they do have to the lower risk option of buy to let borrowers with large deposits and good repayment histories. The fact that interest rates have remained extremely low has protected landlords by giving them cashflow, and future rate rises, which are likely to be small and gradual, are likely to be covered largely by rental increases."


Notes to Editors

A survey of Assetz' database of 3,300 investors was carried out in September 2012.

About Assetz plc

Assetz plc heads up a group of well-known and successful property and financial services companies. As well as sourcing and advising on carefully selected UK and overseas investments, the group advises on a number of property funds, provides regulated financial planning and mortgage brokering services, loans and financial and investment education.

The Assetz group of companies was founded by Stuart Law, a regular media commentator.

Assetz: 0845 400 7000 or visit www.assetz.co.uk

For further information please contact:

Sarah Lawrence or Laura Scarrott, The Wriglesworth Consultancy:

020 7427 1400 s.lawrence@wriglesworth.com l.scarrott@wriglesworth.com

Stuart Law, Chief Executive, Assetz plc: 07977 982 401 stuart.law@assetz.co.uk

Chief Executive’s Blog: http://investors.assetz.co.uk/blog/archives.php

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Stuart Law, CEO of Assetz Plc, is an experienced & active investor in property, whose views are often sought by the media. Stuart Law's Property Investment Blog