"Most investors plan to sit tight until they show their next hand, opting to neither reduce nor increase their level of investment."
- Chris Kirkwood, director at Sourced Franchise
Sourced Franchise found that with the exception of stocks and bonds, real estate remains the most predominant area of investment within the UK. No-HMO buy-to-let were the most popular property investment for those placing their money into bricks and mortar, followed by residential development, holiday homes, overseas property, and buy-to-sell investments.
Although the housing market in the UK has stalled in recent months, Sourced Franchise believes there hasn’t been a significant reduction in either house prices or property investment portfolios. Of those surveyed, only 29% of investors said that they’d seen a decline in the value of their portfolio since interest rates began to climb in December 2021, while 89% had seen a return from their portfolio across the last five years.
Consequently, only 31% were concerned about the current market conditions and the long-term profitability of their portfolio moving forward. Of those concerned, the biggest worries were legislative changes, increasing interest rates, and inflation.
Although 69% of investors weren’t concerned about their portfolio profits, they’re still treading with caution over future investments. Sourced Franchise reports that 55% said they would be sitting tight, neither increasing nor decreasing the size of their portfolio this year, while 29% said they’re waiting to see how things play out before making further investments.
When asked for their market predictions, 52% said that house prices will reduce, but only marginally and at a gradual pace. 29% thought the market would continue to tread water with no significant chance, whilst 13% of investors believe there will be a crash of £30k or more. Only 6% said they’re expecting a rally and further positive growth.
Commenting on these findings, Chris Kirkwood, director at Sourced Franchise, has said:
“Confidence amongst investors remains largely unwavering and despite the wider economic picture, the resilient nature of the property market has meant that the majority are yet to see any negative impact to the value of their bricks and mortar portfolio.
“While the rest of this year is being viewed with perhaps a greater degree of caution, the overarching opinion is that the market will remain there or thereabouts, with no meaningful reduction in property values on the cards.”
