Positive outlook for long-term landlords

Posted: 31 Jan 2008 11:12:31 GMT

Landlords who are committed to holding onto their properties for the long-term will benefit from future house price growth.

Landlords who are committed to holding onto their properties for the long-term will benefit from future house price growth.

Martin Gahbauer, senior economist at Nationwide, said that long-term investors are unlikely to suffer as a result of a slowing housing market.

Concerns have been raised that some buy-to-let property investors will not make short-term gains as the housing market slows.

However, Mr Gahbauer pointed out that those who are in it for the long-term will see good returns.

"A property investor planning to hold the investment over a long period will benefit from future rental growth and is in a better position to ride out temporary periods of weak capital gains," he commented.

"Over the last thirty years - which includes several house price cycles - the compound annual growth in nominal house prices has been slightly over nine per cent.

"However, under the much more conservative assumption that future house price growth averages only 3.5 per cent per year, a buy-to-let investor holding the property for the longer term could probably still expect reasonable after-tax returns," added Mr Gahbauer.

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