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Property investors defy Brexit scaremongering

UK property investors are planning to increase their property portfolios in the next 12 months, according to research provided exclusively to FTAdviser.

According to an independent survey commissioned by Experience Invest, 39 per cent of real estate investors in the UK are planning to add to their holdings, with just 11 per cent seeking to reduce their property portfolios.

A further 35 per cent said they would be maintaining their current number of properties, with 15 per cent planning to sell some assets to then reinvest in new properties.

The research dispels the myth that investors are turning their backs on bricks and mortar as an investment as a result of tighter tax regulations and ongoing Brexit uncertainty.

Of the 54 per cent that plan to invest in more properties during the year, Greater London is the most popular destination, followed by the North West and Midlands.

The least popular areas for property investors, according to the research, were Northern Ireland, East Anglia, Wales and Scotland.

Jerald Solis, business development and acquisitions director at Experience Invest, said: “In light of tighter tax regulations on landlords and on-going Brexit uncertainty, there have been some doom and gloom predictions about the future of the UK property market. But this research shows that, as an investment asset, real estate is still hugely popular, with a significant number of property investors looking to grow their portfolio further in 2019.

“It is interesting to see that, while London remains the most popular location for property investment, other regions across the UK are very close behind. In particular, the North West has established itself as something of a ‘hotspot’ for buy-to-let investors, with cities like Liverpool and Manchester providing strong rental yields and healthy capital growth.”

Property investors are most attracted to houses, with 67 per cent looking here for their next purchase. This is closely followed by flats at 54 per cent and new builds at 39 per cent.

Other leading asset types within real estate were commercial and semi commercial properties.

Adrian Lowcock, head of personal investing at Willis Owen, said: “The results are not too surprising, property has been a very successful investment for many over the past couple of decades and, as such, there are a lot of investors who will reinvest into the asset class as they see it as the gift that keeps on giving.

“The recent falls in prices in some areas are nowhere near enough to convince property investors the bull market is over and they have also been supported by Governments who have looked to shore up the property market following the financial crisis.”

Mr Lowcock added: “I am not sure buy-to-let landlords would look at many other investments as a genuine alternative. They are often a different type investor and they are not necessarily the type of people who would invest in shares.

“Property is a physical tangible asset which they can work on, see and manage whilst owning shares is less visible and more often than not requires investors not to take any action – just to do some occasional background reading.

“Brexit is a huge risk to the property market and arguably some of the damage has already been done. An eleventh-hour agreement might help avoid big falls in the property market but it will take a while to see what damage has been done and how long it might take for the market to recover.

“Overseas investors might take a bit longer to come back as property investment requires a bigger financial commitment and is more illiquid than the stock market.”

The research was based on responses from more than 500 buy-to-let landlords and real estate investors from across the UK.

By Jenny Turton

Source: FT Adviser