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Buy-to-let property provides safety amid financial turbulence

  • 03/09/2015
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Buy-to-let property provides safety amid financial turbulence
Despite ongoing financial troubles in China which have reverberated across global markets, buy-to-let property remains a 'safe haven' asset, according to Commercial Trust.

Last week stock markets across the world were sent tumbling after the Shanghai stock exchange suffered its biggest collapse in nearly a decade, leading to a £84bn loss on London’s FTSE in a single day, while New York’s Dow Jones index plunged by 588 points.

As markets recover from the turbulence caused by the Chinese economy, Andrew Turner, director of Commercial Trust, said property was among assets that currently provide a ‘safe haven’ for investors looking for low exposure to stock market volatility.

“Buy-to-let landlords typically invest for steady, long-term gains and therefore should not be affected by the peaks and valleys that shares see on a day-to-day basis. If anything, the recent turbulence could convince more people of the relative security of bricks and mortar,” he said.

Estate agents have also reported increased levels of interest from overseas buyers, despite speculation that nervous Chinese investors could pull out of the prime London market.

Commercial Trust said should the Bank of England choose to delay an interest rate due to slowing growth, the resulting low cost of borrowing could boost the UK property market further.

“Buy to let remains a sensible, viable investment for those who play it right,” Turner added.

“By remaining as educated and informed as possible and seeking professional advice where appropriate, investors can maximise their chances of retaining a profitable asset that will weather any short-term economic storms that crop up.”

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