Research from Sourced Franchise has found that while 71% of UK property investors are yet to see a decline in the value of their property portfolio, over half don’t intend to add to it this year due to cooling market conditions and wider economic uncertainty.
The survey of UK investors, commissioned by Sourced Franchise, found that with the exception of stocks and bonds, real estate remains the predominant area of investment within the UK.
No- HMO buy-to-let was also the most prominent area of property investment for those placing their money into bricks and mortar, followed by residential development, holiday homes, overseas property and buy to sell investments.
While the UK housing market may have stalled in recent months, we’re yet to see a significant reduction in house prices and it seems the same can also be said for property investment portfolios. Just 29% of those surveyed by Sourced Franchise said that they have seen a decline in the value of their portfolio since interest rates started to climb back in December 2021.
What’s more, on a longer-term basis of the last five years. 89% have still seen a return from their portfolio, demonstrating the strength and consistency of UK real estate.
No surprise then, then just 31% are concerned about current market conditions and the long-term profitability of their portfolio going forward, with legislative changes, increasing interest rates and inflation the biggest causes for concern.
But while the majority of investors are confident in the performance of their current portfolio, they are also treading with caution over future investments.
55% surveyed said that they would be sitting tight, neither increasing, nor decreasing the size of their portfolio this year, while a further 29% are waiting to see how things play out before making further investments.
When asked about their predictions for the market itself, 52% believe house prices will reduce but only marginally and at a gradual pace. 29% think the market will continue to tread water with no significant change, 13% are expecting a crash of £30,000 or more, with 6% expecting a rally and further positive growth.
Sourced Franchise Director, Chris Kirkwood, commented:
“Confidence amongst investors remains largely unwavering and despite the wider economic picture, the resilient nature of the property market has meant that the majority are yet to see any negative impact to the value of their bricks and mortar portfolio.
While the rest of this year is being viewed with perhaps a greater degree of caution, the overarching opinion is that the market will remain there or thereabouts, with no meaningful reduction in property values on the cards.
As a result, most investors plan to sit tight until they show their next hand, opting to neither reduce or increase their level of investment.”
Data tables
Data tables and sources can be viewed online, here.
