7 June 2014

Investors who purchased a buy-to-let property with a deposit of £25,000 in 2000 have notched up a healthy £33,288 profit (133 per cent) over the past seven years.

This is significantly higher than the £1,443 (5.8 per cent) achieved by those who invested this amount in the FTSE 100 over the same period.

The second most profitable asset class to invest in was gold, which has turned in a profit of £19,818, an increase of 79 per cent on investors' initial stake seven years ago.

Whilst a relatively under-utilised asset class gold, says Landlord Mortgages, has provided excellent returns in the recent economic climate, fuelled by rising oil prices.

Cautious investors who placed their capital in a savings account did not enjoy comparable gains although with a £9,755 profit, they fared considerable better than those who chose to invest in the stock market.

Buy to Let performance chart.

Property Needs More Work

Lee Grandin, Managing Director, Landlord Mortgages, comments: "While buy-to-let property may not be an option for everybody, our latest research shows that you can make considerable gains on capital invested in this asset class.

"However, it is worth bearing in mind that buy-to-let often requires more commitment from investors than other asset classes and should be treated as a business rather than simply an investment.

"Potential landlords need to make sure they do their research thoroughly and understand the nature of the market fully before they make this type of commitment. It is also worth bearing in mind that rental yields have been in steady decline over the past few years which has caused some difficulties.

"Whilst buy-to-let has outperformed the other classes included in this research, the old adage applies. By avoiding putting all your eggs in one basket you stand a much better chance of long term gain by not pinning your hopes on the development of one particular sector."

The Property Ombudsman
Association of Residential Letting Agents
Association of Residential Letting Agents
On the Market January 2015
Safe Agent Logo
Martin House Logo