Property remains top dog for investors

Residential property remains the most preferred form of investment in the UK.

According to the latest Owner Managed Business Barometer from the Bank of Cyprus UK, seven in 10 OMBs believe that land allocated for residential property development will deliver the greatest return on investment in 2016.

When asked about their own personal investment preferences, more than half (52 per cent) considered residential property to be the most attractive.

The barometer findings reveal that just 13 per cent of OMBs believe land used for shops/retail would deliver the greatest return in 2016. Similarly, stocks and shares, cash, pensions and commercial property all ranked far lower than residential real estate as investment choices for OMBs.

This is despite the Chancellor’s recently announced changes to the buy-to-let market, which will see a 3 per cent stamp duty surcharge added to any purchases of second homes in the country, including buy-to-let investments.

In April 2017, current proposals will also see tax relief for landlords cut from 40 per cent to 20 per cent, making buy-to-let significantly less financially viable for smaller investors.

Lakis Kasapis of Bank of Cyprus UK comments: “We know from experience that OMBs are very committed to property as their preferred destination for longer-term investment. It is therefore not surprising that despite the clampdown on landlords announced by the Chancellor in the last two Budgets, OMBs still see the residential property market as an attractive investment opportunity.

“However, it remains to be seen whether we experience a rush to buy from potential investors in the first quarter of this year, before the stamp duty increase takes effect in April. Instead, we may see investors waiting in the wings as they assess the potential fall-out resulting from the recently announced tax changes.”