A growing number of people who intended to invest in the UK's vibrant buy-to-let market are now turning their attention towards other asset classes as the government's continued tinkering with taxation on rental properties breeds uncertainty.
According to a survey carried out by rplan.co.uk, as many as nine per cent of people who had intended to put their money into buy-to-let homes have now decided to put these plans on ice, while 14 per cent of those who already invested in rental properties are thinking about selling one or more of their assets in order to cut costs.
What is somewhat problematic for the property market is that many of these people who previously had money they wanted to invest in the sector are not adopting a wait and see approach, but rather looking towards other asset classes instead.
The survey shows that as many as 30 per cent of those who intended to invest in buy-to-let are now looking at putting their money into ISAs, for example. In addition to this, 39 per cent are planning to put money into cash accounts, and 20 per cent are considering using pensions as their saving strategy.
On top of this, many are turning back towards the traditional asset classes of stocks and shares, with some 13 per cent suggesting this will be their new strategy.
"The British have strong faith in property as an investment and many see it as a means of providing a pension income. But the government clearly has a policy to dis-incentivise BTL and the sharp increase in landlord mortgages revealed by the Bank of England credit survey will probably be a last rush before the gate slams shut," said rplan.co.uk’s chief information officer Stuart Dyer.
He also said some people are looking towards diversified investment portfolios as a way to take the stress off their property stock, spreading their money a little more widely in order to hedge their bets.