In the face of shifting economic tides, the majority of property investors in the UK remain resolute in their belief in the value and stability of their investment portfolios, according to a recent study conducted by Sourced Franchise. A staggering 71% of these investors have witnessed no decline in their portfolio values since the Bank of England initiated a departure from the historically low interest rate of 0.1% in December 2021.
The study further illuminates the robustness of real estate as an asset class, with 89% of property investors reaping positive returns from their holdings over the past five years. This statistic underscores the enduring appeal and dependability of real estate, even amid fluctuations in the broader economic landscape.
Interestingly, real estate stands out as the second most favoured investment avenue in the UK, closely trailing behind stocks and bonds. Sourced Franchise’s Director, Chris Kirkwood, highlights the resilience exhibited by investors and the property market alike, emphasizing that the majority have yet to witness any adverse effects on the value of their property portfolios.
“While the remainder of the year is regarded with an air of caution, the prevailing sentiment is that the market will remain relatively stable, with no substantial depreciation in property values looming,” Kirkwood states. He asserts, “As a result, most investors intend to maintain their current positions, refraining from altering their investment levels.”
The research divulges that within the realm of property investment, the most favoured option is the House in Multiple Occupation (HMO) buy-to-let strategy. Following closely are preferences for residential development, holiday homes, overseas property, and buy-to-sell investments.
Nonetheless, the study sheds light on a cautious outlook embraced by some investors, driven by evolving market dynamics and legislative changes. About 55% of participants revealed that they do not intend to modify the size of their portfolios within the current year, while 29% are adopting a “wait-and-see” approach before committing to further investments. Only a mere 16% expressed plans to expand their portfolios.
Foremost among the concerns expressed by property investors are apprehensions related to legislative alterations, encompassing tax reforms and novel regulations. Also weighing heavily on investors’ minds are the prospects of increased interest rates and inflation, alongside the enduring aftershocks of Brexit on both the economy and the housing market.
In summary, the study from Sourced Franchise paints a portrait of unwavering investor confidence in the face of economic shifts. While a degree of circumspection characterizes the outlook for the remainder of the year, the property market appears poised to sustain its current trajectory, resonating with investors’ sentiments of stability and resilience.