Property still top choice for SME investment » SMEInsider

Property still top choice for SME investment

Despite changes to the rules governing stamp duty on buy to let property, it seems business owners still remain firmly bullish on residential property as an investment.

New research from Bank of Cyprus reveals that over half (53%) of owner managed businesses (OMBs) see residential property as the most attractive investment option for their surplus cash

That figure represents a 1% increase since the last version of the research, conducted in early November 2015, before the Autumn Statement and the Budget, both of which penalised buy-to-let landlords


Rule changes

April 2016 saw a change in the law, whereby landlords in England and Wales would in future have to pay a 3% surcharge on each stamp duty band. This measure sits alongside the personal rate of tax relief for landlords being cut from 40% to 20% to be introduced from April 2017.

But what of commercial property? Revealingly, the Bank of Cyprus findings reveal that while residential property is the overwhelming investment choice for OMBs, just 8% of OMBs see commercial property as an attractive investment. Cash investments (16%) and stocks and shares (13%) also fall far behind residential property in terms of attractive investment options.

Commenting on the research findings, Lakis Kasapis of Bank of Cyprus UK said: “Despite the new measures making life harder for buy-to-let landlords, demand for residential property as an investment is still strong, and surprisingly people are even slightly more bullish about buy-to-let investments than six months ago.”

“We saw a rush to buy in the first quarter of this year as investors capitalised on buy-to-let property purchases before the stamp duty increase took effect in April. It remains to be seen, however, if this appetite for investing in the residential market will now come to a hard stop following the stamp duty increase, or whether it will continue given the scheduled personal tax relief changes and the continued uncertainty surrounding a potential Brexit”.