Investing in Property - UK - July 2008

Abstract

UK consumers have long been renowned for their strong affinity to property ownership. Indeed, these home ownership aspirations have led to a sharp increase in the overall level of owner-occupation over the last three decades. As a result, the household sector now holds almost half of their total assets in bricks and mortar. Furthermore, the booming housing market of the past 12 years has encouraged an increasing number of people to sink even more of their money into property investments.

This vividly highlights the fact that a significant proportion of the consumer base do clearly perceive property to be a particularly effective and secure way of saving for their future. However, a key question now is whether this confidence will evaporate as the housing sector enters an anticipated downturn in its fortunes, or whether they will retain their faith in the long-term value of property investments.

This report provides an assessment of the current conditions within the property investment sector. It analyses the latest market data, considers the prospects for future growth and reports industry views on a range of salient issues. In addition, it provides analysis of Mintel' s independently commissioned consumer research, which identifies the proportion of adults who own property-based investments and establishes the potential for future demand; considers the impact of the credit crunch and negative economic backdrop on consumers' desire to invest in property; and seeks to gain a broader insight into consumer attitudes

Key report themes:

• Mintel' s research found that almost one in ten consumers now hold some kind of property-based investment.
• Buy-to-let is the most common way to invest in property, with the research implying that around 2 million consumers now own an investment property that they rent out.
• There was also evidence of strong latent demand, with one in six consumers declaring an interest in buying an investment property, over half of whom stated a strong intention to do so.
• Furthermore, the prospect of a housing market downturn seems unlikely to dampen this enthusiasm, with more than a quarter of consumers saying they would be tempted to invest in buy-to-let if property prices fell significantly.
• In addition, just over half of all consumers agreed that strong rental demand makes it a particularly good time for the buy-to-let sector.
• The research also found that an increasing proportion of consumers feel that renting a property is better value than buying, with one in ten now holding such a view, although the proportion actually preparing to sell up and move into the rented sector remains extremely low.