Majority of property investors in UK set to expand their portfolios this year

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Majority of property investors in UK set to expand their portfolios this year

A majority of property professionals investing in the UK are set to expand their portfolios in 2019, remaining resilient despite a backdrop of uncertainty and squeeze on affordability.

Some 80% of investors said they plan to increase their portfolios this year while 20% said they are not making any changes in 2019, according to the poll by MT Finance, but none said they would reduce their investment.

Of the 80% looking to expand their portfolios, 39% are looking to buy in the South East of England, 25% in Wales, followed by 13% in the Midlands. Whilst 16% revealed that would not be buying property in the UK and none are set to buy in London which is currently considered too expensive.

The firm says that the latest forward looking results are encouraging especially as 51% of respondents revealed they are uncertain of the conditions for property investors in 2019 and 28% believe conditions will not improve in the coming year.

It points out that overall 2018 was another challenging year for property investors in the UK, as Brexit negations continued and finances were squeezed by tax changes. When asked what the biggest challenge for property investors had been last year some 40% of respondents said affordability.

Ongoing Brexit uncertainty was the second biggest challenge at 32%, followed by accessing funding at 17% while 11% said Government legislation was the biggest challenge in 2018.

During 2018, some 48 of the 101 respondents revealed they had purchased residential properties as investments and 43 respondents had bought commercial properties, 21 said they bought foreign properties as investments while 50 said they didn’t purchase any property in 2018.

‘The UK property market has seen a reduction in high value purchase transactions. This is reflected in the latest data from HMRC, who revealed stamp duty receipts fell by £1 billion last year,’ said Gareth Lewis, commercial director, MT Finance.

‘The results from our fourth quarter property investor survey highlight how higher stamp duty and a lack of affordability has pushed property investors out of London, where more rental properties are vital,’ he explained.

‘While there is continuing uncertainty, particularly over how the Brexit negotiations will unfold, UK property investors remain resilient. The fact that property professionals have revealed they will continue to invest in the UK, despite the uncertainty and numerous challenges, bodes well for the future of the market,’ he added.