Punitive tax measures and changes in regulation are behind a growing majority of UK investors who now feel that buy-to-let investments have lost their appeal, new research from Shojin has revealed.
The investment platform commissioned an independent survey among 690 UK adults, all of which have investment portfolios worth in excess of £10,000 – this includes all forms of investments but discounts their savings, pensions and property used as a primary residency.
It found that, for 61% of retail investors, BTL investing has lost its gloss in recent years following many tax and regulation reforms.
The research also underlined the perceived complexity of property investing. Two-fifths of investors (40%) said they would be inclined to invest in real estate without the complications that come with property ownership. Among those aged 18-34, the figure rises to 67%.
Shojin’s research found that despite the perceived barriers to traditional equity ownership, 59% of investors consider real estate to be a strong asset class to invest in at present. Most (58%) respondents expect house prices to continue rising in the coming 12 months, with a further 51% citing the current supply and demand imbalance as a strong factor behind the appeal of real estate as an investment.
Looking ahead, the research showed that 37% of respondents would be inclined to consider fractional investment as a way of gaining a stake within the real estate landscape.
Jatin Ondhia, CEO of Shojin, said: “It’s been a year of immense volatility and investors are continuing to balance risks and opportunities against a complex economic backdrop. Crucially, our research points towards some notable trends in real estate investment. For one, it underlines that the appeal of BTL investing is in decline; higher stamp duty, the removal of tax reliefs, and greater regulation in the market are deterring people from traditional property investment.
“That said, the study showed that most investors still believe in the resilience of bricks and mortar as an investment asset in the current climate. And clearly, retail investors are increasingly open to exploring different investment avenues as a means to achieving positive returns from property without owning the actual asset. We expect this trend to gather momentum as more digital advances continue to challenge traditional barriers of entry to property investment.”