20 things

Landlord Mortgages’ Buy-to-Let Asset Class Research

25 August 2007

1 Research by Landlord Mortgages has revealed that buy-to-let (BTL) has seen the best returns between 2000 and 2007, with 133 per cent growth.

2 The research revealed that investors who purchased a BTL property with a £25,000 deposit could expect a £33,288 profit over the past seven years.

3 This was compared to the £1,443 average profit achieved by those who invested in the FTSE 100 over the same period, Landlord Mortgages claimed.

4 The £1,443 increase represented a 5.8 per cent rise.

5 Landlords who invested in BTL property in 2000 and sold in Q2 2006, made a profit of 111 per cent.

6 Gold investors made a profit of 78 per cent, according to the study.

7 Savers made average profits of 32 per cent, the research revealed.

8 The study suggested those who invested in the stock market actually made a loss between 2000 and 2006.

9 By selling in June 2006, people who invested in stocks and shares would have made a loss of 8 per cent during the six-year period, from 2000.

10 Investors who placed their capital in a savings account obtained a £9,755 profit, the research showed.

11 Lee Grandin, managing director of Landlord Mortgages, said: “While BTL may not be for everybody, our research shows that you can make considerable gains on capital invested in this asset class.

12 “However, it is worth remembering that BTL requires more commitment from investors than other classes and should be treated as a business.

13 “While gold is a relatively under-utilised asset for most consumers, this has also provided healthy returns over the past seven years and it will be interesting to see if this continues in the long term. Investors who invested in the FTSE 100 appear to have been burnt by the poor performance of the stock market.

14 “While BTL has outperformed the other classes included in this research, the old adage applies. By avoiding putting all your eggs in one basket you stand a better chance of long-term gain.”

15 Landlord Mortgages calculated the BTL returns on the capital appreciation of a property between Q1 2000 and Q2 2007, with the assumption that the property was bought using a repayment mortgage and the rental income covered this.

16 The data was sourced from the Halifax House Price Index.

17 The FTSE returns were calculated on the average quarterly growth in the FTSE 100.

18 The data was sourced from www.ft.com.

19 The gold data used in the survey was sourced from gold.com.

20 The savings figures were taken from the Bank of England with returns calculated on a Base Rate savings account.

Get the daily news delivered to your inbox
Download our news ticker
Find the latest industry jobs