Buy-to-let investors are still seeing positive returns from their property portfolios, although potential government tinkering and persistently high interest rates are a concern.
This is according to the findings of research carried out by property investment platform Sourced Franchise.
The survey of more than 7,500 UK high net worth investors found 71 per cent of UK property investors are yet to see a decline in the value of their property portfolio.
Just 29 per cent of those surveyed by Sourced Franchise said their portfolio values had decreased since interest rates started to climb back in December 2021.
However, more than 50 per cent cited growing economic and political uncertainty as reasons why they are not making any new purchases this year.
With the exception of stocks and bonds, real estate remains the predominant area of investment within the UK.
Non-HMO buy-to-let was also the most prominent area of property investment for those placing their money into bricks and mortar, followed by residential development, holiday homes, overseas property and buy to sell investments.
| Answer | Respondents |
| Government legislative changes | 36% |
| Interest rates continuing to climb | 26% |
| Inflation remains high | 12% |
| Cooling property market conditions | 11% |
| A potential change to the political landscape | 7% |
| Current political landscape | 6% |
| The ongoing Ukraine conflict | 2% |
Source: Sourced Franchise
Over the past five years, 89 per cent of respondents said they have seen a return from their portfolio, demonstrating the strength and consistency of UK real estate.
However, 31 per cent said they were concerned about current market conditions and the long-term profitability of their portfolio going forward, with legislative changes, increasing interest rates and inflation the biggest causes for concern.
Moreover, 55 of those surveyed said that they would be sitting tight, neither increasing nor decreasing the size of their portfolio this year, while a further 29 per cent said they were waiting to see how things played out before making further investments.
Sourced Franchise director Chris Kirkwood said: "Confidence among investors remains largely unwavering and, despite the wider economic picture, the resilient nature of the property market has meant the majority is yet to see any negative impact to the value of their bricks-and-mortar portfolio."
He said that while the rest of 2023 was being viewed with perhaps a greater degree of caution, the overarching opinion was that the market will remain there or thereabouts, with no meaningful reduction in property values on the cards.
Kirkwood added: "As a result, most investors plan to sit tight until they show their next hand, opting to neither reduce or increase their level of investment.”
simoney.kyriakou@ft.com
