A study undertaken by former economist Rob Thomas has shown that buy-to-let investments have outperformed all other investments for the past 18 years. It’s an impressive statement, and one that is backed up by even more impressive data.
By calculating return figures to 2013 for each £1,000 invested at the end of 1996, the study found that buy-to-let investments with 75% loan-to-value mortgages had a compound annual return of 16.3% due to their increased leverage. This compared to 9.7% for buy-to-let investments using cash. Both numbers reflect the primary reason that investors are being drawn to buy-to-let investments: high yield and consistent returns.
The report predicted that buy-to-let investments would out-perform other investment classes over the next decade. However, it’s easy to see how stories like this can cause confusion for potential investors, as it appears to be in stark contrast to The Telegraph’s own study which showed rental income could dip below mortgage costs as soon as 2017, putting certain types of buy-to-let investors at risk.
The key to intelligent and safe investing lies in doing your homework, or at least choosing investment companies that you can trust due to their extensive understanding and expertiseand of course choosing a well reputed letting agent to look after your investment.
We are confident that carefully-selected buy-to-let remains a great opportunity for investors and will continue to offer solid and stable returns for many years to come.