Over a third of London buy to let property owners no longer view property as a good investment, according to a survey of over 1,000 UK investors and 500 High Net Worth Individuals.

Recent changes to the tax treatment of buy to let investments as well as the introduction of new regulations by the Prudential Regulation Authority affecting portfolio landlords, have led to many buy to let property owners now re-evaluating the cost-effectiveness of property as an investment, the survey for Rathbone Investment Management has found.

Nearly half of the High Net Worth London investors surveyed currently own buy to let properties but just 17 per cent plan to increase their portfolio.

Well over a third  of the HNW investors surveyed had accumulated their wealth through property, whilst 27 per cent currently had investments in private real estate, 17 per cent in commercial real estate and 12 per cent in land.

Robert Hughes-Penney, investment director at Rathbones, says: “Recent changes to the tax and regulatory treatment of buy to let has caused investors to take a step back and assess the viability of these investments.”

“Whilst it’s understandable that property, and in particular residential property, has been a popular investment in the past, it’s now making less and less sense. Not only are the returns now being impacted by an increased rate of tax, but they can also prove high risk investments due to a lack of diversification. Property investments require a large amount of capital to be held in one single asset and landlords will often hold a number of properties within one region.”

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