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Buy to let profitability soaring across Europe

03/04/2007

Poland and the UK are the most profitable countries for buy to let investors, new figures from the Assetz Property Investment Tracker show…

The Tracker, which records the buying costs, rental yields and capital growth for 14 key investment destinations, shows Poland in first place with a total 165% return in cash investment, followed by the UK with 63%, Bulgaria with 54% and France with 51% (see Table 1).

Table 1

Hide table

Assetz Property Buy To Let Investment Tracker

Country

Net rental return on cash invested

Net capital gain as return on cash invested

Total return on cash invested

Poland

0.4%

165%

165%

UK

6.1%

57%

63%

Bulgaria

-3.5%

58%

54%

France

10.9%

40%

51%

Turkey

1.9%

43%

45%

Greece

3.3%

40%

43%

Spain

6.4%

36%

42%

South Africa

-11.9%

52%

41%

Cyprus

6.3%

31%

37%

Portugal

9.8%

27%

37%

Florida/USA

1.6%

31%

33%

Italy

6.2%

11%

18%

Northern Cyprus

4.8%

0%

5%

Germany

2.7%

1%

4%

Print Features Archive Show Full Table

This latest research suggests that many investors will be keeping their money closer to home in 2007, benefiting from continued strong and sustainable housing market growth in the UK.

The six major UK house price indices show an average of 9.8% annualised growth for the twelve months to February 2007, primarily as a result of the continued imbalance between supply and demand.

UK remains low risk investment destination

The UK remains a low risk investment destination. Despite recent interest rate rises, purchasing costs remain low and the prospect of avoiding management costs through self-management, which is attractive to investors and not generally possible for overseas properties.

Stuart Law, Managing Director of Assetz comments:

“The growing demand for homes, driven by high immigration and the forthcoming expansion of the EU to include such countries as Bulgaria, Poland and Romania, will continue to drive demand for the buy to let market over the next few years. As first time buyers are increasingly priced out of the market, demand for rental properties is likely to rise, providing a strong basis for buy to let investment.

“The overall shortage of homes is set to drive house prices in the UK up by 8 – 10% in 2007 and 2008, encouraging investors to take a long term view and benefit from strong capital gains despite historically low yields.”

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