New research by British Pearl, a property investment platform, has revealed that over a five-year period, around 83% of buy to let investments are profitable , even after stamp duty, legal fees, commercial mortgage repayments and interest payments are factored into the calculations.
Since 1989 there have been periods where house prices fell. The biggest house price falls were from 2007 to 2013. During periods of house price decreases, landlords may be tempted to sell fearing that prices will fall even further. The British Pearl research shows that, if investors hang onto their properties, eventually they will rise in price.
James Newberry, the Investment Manager at British Pearl advises:
“History shows us that investors who are prepared to weather storms rather than run for cover are still able to make strong returns at times from investments that present a very limited risk of loss.
“While our analysis shows housing has been a solid investment over time, we know that returns can be bolstered with careful property selection, identifying regional trends and areas of rental yield strength.”
He said that investing in buy to let property is a long-term investment, and landlords should not be focussed on short term gains. Many investors sold their property portfolios when house prices feel between April 2007 and April 2013, but they should have kept their properties and waited for prices to rise again after 2913. Newberry said that the market rewards investors who are level-headed, have diverse portfolios and do their research.