Landlords favour buy-to-let for greater control over investment success, according to research by buy-to-let lender Mortgage Trust.
Nearly a third of first time landlords cite control over their investment as a major factor influencing their property investment decision. The figure represents a 28% rise on January last year.
John Heron, managing director of Mortgage Trust, says: “Five interest rate hikes in a year have left investors increasingly risk averse. When investing in stocks and shares, your only option if you don’t like the way an investment in a fund or company is performing, is to sell. With buy-to-let, landlords are in the driving seat. As financial markets become increasingly volatile, this level of control will become more attractive to investors."
A further two thirds of landlords believe buy-to-let will generate better returns than investments.
Heron says: “Investors continue to be attracted to the private rented sector due to the attractive returns – our index indicates that yields have been stable around the 6% mark for over a year, whilst total returns on a 12 month investment stand around 11%.
“When gearing is taken into account, the effective yield and total return are much higher. Whilst there is uncertainty in many financial markets at the moment, it is clear that landlords believe buy-to-let remains a solid investment option.’’
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