Mortgages 

Half of investors want to increase property exposure

Half of investors want to increase property exposure

According to a new study by peer to peer lending platform, Crowdstacker, 44 per cent of retail investors want to enhance their exposure to the UK property market by other means than owning their own home.

Among the biggest factors driving investor demand are the long term growth of the UK property market - 62 per cent - followed by strong levels of rental income - 59 per cent - and forecasts suggesting that prices will continue to rise - 50 per cent.

Despite strong levels of appetite for property as an asset class, the research highlights the main reasons deterring investors from buying directly into bricks and mortar.

Over a third - 36 per cent of investors - are concerned about the risks involved in managing properties; 30 per cent are put off by the transaction costs and the risk that prices may fall; 28 per cent wouldn’t have time to manage a property and one in four can’t afford a deposit or a second mortgage.

Almost three quarters - 73 per cent - of investors would be interested in putting their capital to work through a new low risk product that offers a return of over 5 per cent a year by making property loans to developers, landlords and property professionals.

Investor appetite for this opportunity was stronger than for buying shares in companies related to the property market and investing in property funds.

Daniel Bailey, mortgage broker at Middleton Finance, said: “The big growth area over the last 18 months has been buy-to-let lending. A lot of people are disillusioned with pensions which is why they have moved to property. The key word here is long term.”

David Hollingworth, associate director for communications at London & Country Mortgages said: “The survey here indicates the strong interest in property as an investment. Those figures are backed up by what we continue to see in the traditional Buy to Let market, with no sign of lender or landlord interest abating.

“With rents holding up well and house prices on the rise in many regions it’s likely that landlords will continue to be attracted by the prospect for both income and capital growth that Buy to Let offers.

“The use of peer to peer platforms as a funding tool for lenders offering short term and development finance offers an alternative dimension. Investors will need to understand the benefits and risks of either approach before choosing the right route for them.”

ruth.gillbe@ft.com