Buy to let still safe as houses

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Buy to let still safe as houses

Given all the doom and gloom surrounding the property markets in the past 18 months it is refreshing to know that it is still safer to invest in property than other methods of investment.

It may seem an odd thing to say considering that house prices fell by 13.5 per cent, according to Land Registry records, in 2008 and that prices are expected to fall further in 2009.

But consider how the property market has fared against the financial markets that are the other main source for investment, and property doesn’t look so bad.

House prices are still three times their value than in the early 1990s whereas the stock market, FTSE 100, has still yet to hit its high of 6,939 in 1999. Also the value of the FTSE 100 fell by over 30 per cent in 2008, with its current value at 4,187. Pension funds, which are directly linked to the stock markets, have also fallen 30.7 per cent in the same period.

While house prices are falling it is still worth noting that the UK still has a chronic shortage of housing and that the current price falls have nothing to do with oversupply but a severe lack of affordable credit.

The outlook for the let property market is better than many would think with interest rates at their lowest in history, with further cuts expected, and rented property in high demand, landlords should see their rental yields start to rise throughout 2009.

Residential property landlords can help to reduce their outgoings by ensuring that they have the best let property insurance on the market. At insuremyletproperty.co.uk landlords can compare let property insurance from a panel of specialist let property insurance companies in the UK.

February 04th 2009

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