Look long term for an investment safe haven

The current market is a volatile terrain and identifying viable investment opportunities is arduous but buy-to-let is the best bet according to Nick Carlile, founding partner of Platinum Portfolio Builder.

Interest rates remaining at an all-time low have severely impacted growth on savings and an extremely volatile stock market has left many investors in a state of confusion about where they can safely place their money. Reports in recent weeks suggest that poorly designed investment strategies have resulted in many defined contribution, or personal pension funds losing a quarter of their value in just seven weeks.

As a result, Nick Carlile says that interest in buy-to-let investments has risen sharply as ever-increasing rents have attracted investors.

“Property provides an asset backed income stream which, despite being subject to periodical peaks and troughs like anything else, has still averaged 4.9% growth per annum since 1970,” he said. “House prices have doubled in the last decade, even taking into account the property correction of 2007-2009. Over the last thirty years residential UK property has out-performed both commercial property and equities.”

This surge of interest in buy-to-let as an investment strategy is a trend that has been echoed across the market as UK house builder Barratt has also recorded a 25% rise in sales to investors for the first half of this year.  

Nick says that the secret to this strategy however, is longevity and that mistakes that many investors have made previously have been to only to look short term. “You have to treat buying a property like any other investment which means setting goals and thinking about a time frame and strategy as well as what you can afford to spend. It's best to hold on to a property for at least seven to 10 years to achieve good capital growth.”

He added: “House prices won't necessarily go up evenly from one year to the next but rising rents and greater demand for rental properties than ever before offers a source of income whilst investors adopt a buy-and-hold strategy to protect themselves against market movement.  Also because of the overall position of the market this is certainly a buyers’ market where significant discounts can be achieved.

“Gone are the days of the short term buy and sell to make a quick buck, but investors need to realise property is a solid wealth creation vehicle with built in capital growth opportunities.”