Buy-to-let beats gold, cash and fine art for investment returns in the last decade

March 20, 2019

Research by VeriSmart, the UK’s only combined lettings inventory and property compliance specialists, has looked at just how lucrative the UK buy-to-let market has been in the 10 years since the financial crisis when compared to other investment options like the FTSE 100, classic cars, gold and fine art.

VeriSmart looked at the return on each investment and how each market has performed over the last 10 years with the research showing that buy-to-let property is up there with the FTSE 100 and classic cars when it comes to a sound investment.

Investing in the FTSE 100 would have brought the biggest return when considering the annual capital gain and the percentage yield with an increase of 119%, whilst the value of classic cars is up 94% during the same time period.

However, for those that aren’t professional investors or that don’t have the garage space for a fleet of classic cars, a buy-to-let property is a very good ‘next best option’ and, when considering the annual gain in house prices along with the increase in rental yields, an investment in the sector a decade ago would have brought a 92% return today.

This is much higher than the 60% return that investing in gold would have brought and a world away from the 16% increase in cash or the -4% drop in fine art.

It’s also important to note that the growth in the property market has been by far the most reliable option with the FTSE 100, gold or cash providing a far more volatile option that is also open to a larger degree of impact from political and economic factors as well as influence from other foreign countries.

While classic car investment sits ahead of property, that too is made or broken on the car itself rather than the overall market and while a nice art collection may brighten your walls, it is also harder to find a buyer for – even when compared to the current Brexit property market slowdown.

All things considered and despite successive Chancellors hitting the buy-to-let sector with numerous legislative penalties including an increase in stamp duty, a reduction in high rate tax relief for landlords and a higher rate of capital gains tax on residential property profits, UK bricks and mortar remains one of the best and most stable investments available.

Founder of VeriSmart, Jonathan Senior, commented:

“Last week’s spring statement was a missed opportunity for the Government to backtrack on their previous attacks on the buy-to-let sector, attacks that have done little to solve the UK housing crisis and if anything, have caused further restrictions in the level of suitable stock while keeping rental prices buoyant as a result.

However, the buy-to-let sector remains the backbone of the UK property market, helping to support aspirational homeowners as they work to overcome the sometimes impossible financial barriers of homeownership. The need for this support is clearly evident as it remains one of the most lucrative investments one can make.

With little being done to address property supply or affordability on a meaningful scale, this is likely to continue going forward and despite the Government’s best efforts there will always be demand for a good, honest landlord providing above the board accommodation to those that need it.”

Year
10 Year Gain
 
FTSE 100
119%
Classic Cars
94%
Buy-to-Let
92%
Gold
60%
Cash
16%
Art
-4%
FTSE 100
Year
FTSE 100 Index
Annual Capital Gain
% Yield (Dividend)
% Total FTSE 100 Gain
2009
4147
–
–
–
2010
5302
27.85
3.01
31
2011
5881
10.92
3.62
15
2012
5733
-2.52
3.72
1
2013
6089
6.21
3.46
10
2014
6739
10.67
3.54
14
2015
6501
-3.53
3.98
0
2016
5804
-10.72
3.65
-7
2017
7337
26.41
3.81
30
2018
7730
5.36
4.01
9
Total 10 Year Gain
86.4
32.8
119
Source: FTSE 100 Index
 
Classic Cars
 
Year
Classic Cars
% Total Classic Car Gain
2009
£1,003,733
–
2010
£1,061,562
6
2011
£1,139,465
7
2012
£1,233,351
8
2013
£1,465,975
19
2014
£1,746,184
19
2015
£1,907,475
9
2016
£1,960,490
3
2017
£1,938,526
-1
2018
£1,945,429
0
Total 10 Year Gain
94
 
Source: K500 Index
 
Buy-to-Let
Year
Property value
Annual Capital Gain
% Yield (Rental) Gross
% Total Property Gain
2009
£157,234
–
5.06
5
2010
£167,469
6.51
4.84
11
2011
£167,300
-0.1
4.97
5
2012
£165,908
-0.83
5.14
4
2013
£167,716
1.09
5.05
6
2014
£178,182
6.24
5.14
11
2015
£190,665
7.01
4.88
12
2016
£205,462
7.76
4.66
12
2017
£215,084
4.68
4.64
9
2018
£224,425
4.34
4.47
9
Total 10 Year Gain
42.73
48.86
92
Source: Land Registry
 
Gold
 
Year
Gold per oz
% Total Gold Gain
 
2009
£602.00
–
2010
£693.00
15
2011
£859.00
24
2012
£1,045.00
22
2013
£1,052.00
1
2014
£759.00
-28
2015
£823.00
8
2016
£763.00
-7
2017
£985.00
29
2018
£962.00
-2
Total 10 Year Gain
60
 
Source: Gold.co.uk
 
Cash
 
Year
% Gross Annual Yield on Cash*
 
2009
–
2010
3
2011
3
2012
3
2013
2
2014
1
2015
1
2016
1
2017
1
2018
1
Total 10 Year Gain
16
 
Art
 
Year
Art Index
% Total Art Gain
 
2009
160
–
2010
181
13
2011
208
15
2012
193
-7
2013
194
1
2014
196
1
2015
201
3
2016
153
-24
2017
152
-1
2018
154
1
Total 10 Year Gain
-4
 
Source: ArtPrice
 

 

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