Buy to let has been the outstanding investment of the past 18 years, providing average returns outstripping all other major asset classes, a peer-to-peer lending group claims. Every £1,000 invested in an average buy to let property purchased with a 75 per cent loan-to-value mortgage in the final quarter of 1996 – when buy to let was first actively promoted – would have been worth £14,897 by the final quarter of 2014, a compound annual return of 16.2 per cent.
The same outstanding investment in UK commercial property would have grown to £4,494; in UK government bonds to £3,329; in UK equities to £3,119; and in cash to £1,959.
A buy to let purchaser buying entirely with cash would have seen each £1,000 invested grow to £5,071 by the end of 2014 – a compound annual return of 9.4 per cent.
2014 was a good year for buy to let investors with property prices rising by an average 8.3 per cent claims the firm behind the survey, Landbay.