Buy-to-let is safe haven from financial turbulence

Robyn Hall

September 3, 2015

The Shanghai stock exchange suffered its biggest collapse in nearly a decade on 24 August, sending out shockwaves that rattled financial markets across the globe. London’s FTSE lost £84 billion in a single day, whilst New York’s Dow Jones index tumbled by 588 points.

Over a week on, rattled markets are still struggling to recover, and the troubles in China – the world’s second largest economy – are likely to stall global economic growth.

But some asset classes – such as UK buy-to-let property – remain safer than others.

Andrew Turner, director of CommercialTrust.co.uk, said: “Assets such as gold, bonds and indeed property are safe havens for investors who do not wish to overexpose themselves to the traditionally volatile stock market.

“Buy to let landlords typically invest for steady, long-term gains and therefore should not be affected by the peaks and valleys that shares see on a day-to-day basis. If anything, the recent turbulence could convince more people of the relative security of bricks and mortar.”

Indeed, despite speculation that Chinese investors could pull out of the prime London market following last week’s losses, estate agents have reported increased levels of interest from overseas buyers.

Slowing growth could also force the Bank of England to keep interest rates down for longer, keeping the cost of borrowing low and adding yet more heat to the UK property market.

Between rising rents and property prices, a growing private rental sector and a strengthening buy-to-let mortgage market, rental property looks like a strong choice for a savvy investor.

Turner added: “Buy-to-let remains a sensible, viable investment for those who play it right.

“By remaining as educated and informed as possible and seeking professional advice where appropriate, investors can maximise their chances of retaining a profitable asset that will weather any short-term economic storms that crop up.”

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