Property has been one of the most lucrative investments in the UK over the last decade and delivering a much larger return than other common alternatives including the stock market, gold and savings accounts.
New research by estate agents, Leaders, and its sister company, Romans, compared the return an investor would have had in each of the four markets assuming they invested an initial £50,000 in 2006.
It showed the buy-to-let market has generated a 175 per cent return over the last ten years, equating to a profit of £138,936. In comparison, gold has delivered a profit of £50,673, interest on savings accounts was worth £14,447 and a £50,000 investment in the FTSE 100 has yielded just £2,969 over the same time.
Michael Cook, letting managing director at Romans, said: “Buy-to-let performs significantly better than other investments in terms of an overall return. Our research shows a buy-to-let investor in 2006 would be almost £90,000 better off today than somebody who invested in gold and more than £135,000 up on somebody who bought stocks and shares.
“Although property investment can be more time-consuming and hands-on, with such incredible results at the end it’s certainly worth it.”
Whilst gold, stocks and shares and savings offer greater liquidity than property, which can take several weeks to buy or sell, investors are still turning to renting bricks and mortar for the dual benefits of an immediate monthly rental income and capital growth as the value goes up over time.
Allison Thompson, managing director at Leaders, said: “Despite many changes over the last ten years to the housing market and wider economy, buy-to-let is still the clear winner. As well as the most rewarding, it is also the safest of all the investment options over the long term. We have seen historically that, although cyclical, house prices always rise in the long run. With the acute shortage of housing across the UK, this is only likely to continue.
“Cautious investors can minimise their risks in a number of ways, including utilising rent guarantee schemes to effectively insure their income, an option not available with other investments. This, along with the substantial returns to be made, makes property more attractive than all other types of investment.”
The companies have a property investment hub which lets investors look at selected homes suitable for the buy-to-let market. Their rental history is detailed and many already have a reliable tenant in place.