Is buy to let a busted flush? - survey findings

A new survey shows a significant majority of investors believe buy to let has lost its shine.

Investment platform Shojin’s survey - relatively small, looking at 690 adults with investment portfolios of £10,000-plus - found that 61 per cent of retail investors say they are deterred by tax and regulation reforms in the buy to let sector.

The research also underlined the perceived complexity of property investing. Two-fifths of investors said they would be inclined to invest in real estate without the complications that come with property ownership. Among those aged 18-34, the figure rises to 67 per cent.

Shojin’s research found that despite the perceived barriers to traditional equity ownership, over half of investors consider real estate to a be a strong asset class to invest in at present. 

Most respondents expect house prices to continue rising in the coming 12 months, with a further 51 per cent citing the current supply and demand imbalance as a strong factor behind the appeal of real estate as an investment.

Looking ahead, the research showed 37 per cent of respondents would be inclined to consider fractional investment as a way of gaining a stake within the real estate landscape.

Shojin chief executive Jatin Ondhia says: “It’s been a year of immense volatility and investors are continuing to balance risks and opportunities against a complex economic backdrop. 

“Crucially, our research points towards some notable trends in real estate investment. For one, it underlines that the appeal of BTL investing is in decline; higher stamp duty, the removal of tax reliefs, and greater regulation in the market are deterring people from traditional property investment.

“That said, the study showed that most investors still believe in the resilience of bricks and mortar as an investment asset in the current climate. And clearly retail investors are increasingly open to exploring different investment avenues as a means to achieving positive returns from property without owning the actual asset. 

“We expect this trend to gather momentum as more digital advances continue to challenge traditional barriers of entry to property investment.”