Since the birth of the buy-to-let mortgage 18 years ago in 1996, buy-to-let investments have provided average returns that easily outstrip those of other major asset classes.
Every £1,000 invested in an average buy-to-let property purchased with a 75pc loan-to-value (LTV) mortgage in the final quarter of 1996 would have been worth £13,048 by the final quarter of 2013, providing a compound annual return of 16.3pc, according to research by specialist lender Paragon.
By comparison, someone buying a buy-to-let property buying with cash would have seen each £1,000 invested grow to £4,791 by the end of 2013, providing a lesser return of 9.7pc.However, even this significantly outperformed all other asset classes. The same investment in UK commercial property would have grown to £3,654, providing a 7.9pc return. Meanwhile, UK equities would have produced £3,082, or a 6.8pc return. And gilts, UK government bonds, made £2,924, or a 6.5pc return. Additionally, UK landlords are benefiting from falling mortgage charges and longer fixed rate deals, as competition between mortgage lenders is hotting up.
If you would like advice on the Edinburgh buy to let market, do get in touch, we would be delighted to hear from you.
