£177bn in capital growth for landlords since 2009

It has been calculated that investors in UK buy to let property saw £177bn of capital growth between 2009 and 2014, as residential property once again proved to be a winning investment for millions.

Rising house prices since the credit crunch have led to capital growth contributing more to buy to let investors’ wealth than many would have expected five years ago, when stable income from tenants was generally seen as the biggest attraction of residential property.

Ludlowthompson believes that total returns for buy to let investors will continue to prove attractive, as the structural shortage of housing, especially within London, is unlikely to change in the short or mid term.

Add that to a preference for buy to let investors among many mortgage lenders, and the window of opportunity for those looking for both income and capital growth from residential property remains firmly open.

Stephen Ludlow, Chairman of ludlowthompson, says: “The last five years have proven that buy to let investment can be an excellent tool for capital appreciation as well as income. London’s house price increases have made this particularly true of the capital’s residential property market.

“Those still on the fence about buy to let, or uncertain over whether this is the right time to increase their residential property investments, should take comfort from the fact that much of the growth in London house prices has a stable foundation of structural housing shortage.

“While there has been some talk of a short-term slowdown in property house, it is extremely unlikely that this structural shortfall will disappear in the foreseeable future. That means that demand for rental properties will remain strong. There is no reason to believe that the opportunity for continuing capital growth over the medium to long term has been missed.”