Assetz® News - Survey shows property investment sentiment improving

Survey shows property investment sentiment improving

24th June 2009 |

The last few months have brought plenty of signs of possible green shoots in the property market. Increased buyer interest has been followed by higher buyer numbers, more transactions, rising mortgage approvals and surveys that either suggest house prices are not falling as fast as before or are even starting to rise again.

Even so, what may interest property investors is not whether a few positive signs here or there might appear. After all, the economy remains in recession even if some wider economic data suggests the worst has passed, while unemployment is expected - since historically this is what it does - to go on rising after the economy begins to grow again, which could slow any property market recovery as would-be buyers remain afraid to make big financial commitments while their job security is uncertain.

So for those keen on investing, it may come as considerable encouragement to see research suggesting that sentiment is improving in the buy-to-let sector. The Young Group of property portfolio managers survey for the second quarter has found that an increasing number believe that now is a good time to buy.

Since the second quarter, the number of investors thinking of buying residential property in London in the next year has risen by 12 per cent since the first quarter survey to 52 per cent, while the total for the rest of the country increased from 24 per cent to 30 per cent.

Part of the reason for this positive move is the expectation that values will increase. For London, 57 per cent expect prices to be the same or higher a year from now - up from 49 per cent - and 42 per cent expect this of property elsewhere in Britain, up from 24 per cent.

Commenting on the figures, chief executive of the group Neil Young said: "Making predictions is something that Young Group never likes to do, but this is the second quarter in which we've witnessed an increasingly positive sentiment for the Young Index data."

He added: "The trend continues to move in an upward direction and demonstrates a positivity and willingness of private investors to increase their holdings of residential property."

All this may help persuade wavering investors that now and the near future could be good times to buy. This may be in spite of wider warnings that the economy may take time to pick up, even if the darkest days of recession have gone.

Such a warning came from Angel Gurria, secretary-general of the Organisation for Economic Co-operation and Development today, stating: "Thanks to firm action to stimulate our economies it appears that we have escaped the worst during this crisis. But the next few months will be equally testing. There needs to be a clear and credible plan and timeline for phasing out the emergency measures as the recovery takes hold. It is critical to consider these exit strategies now in order to prevent new risks in the years ahead."

But while there may be some economic uncertainty yet to come, it appears that this is not enough to dampen the growing sense that the future for buy-to-let is getting much brighter.