How Long-Term Investment Pays

In the current climate with its talk of crunching credit, plummeting prices and declining dividends, many have seen the buy-to-let market as a near-certain victim of the emerging economic circumstances.nnNot so, it seems, judging by recent surveys in the industry, which have found the majority of investors feeling rather more optimistic than one might expect. What the Association of Residential Letting Agents (Arla) this month, plus Alliance & Leicester and Bradford & Bingley last month found was that this optimism went hand-in-hand with a commitment among most investors to be in it for the long-term. Arla, for instance, found that the average investment time was for 16.7 years while just two per cent of those polled said their involvement was intended to be for less than two years. nnThis attitude appears to have been encapsulated by the calculated actions of investor Angela Cook, an estate agency office manager in Middlesbrough. She explained to nebusiness.co.uk this week that her investment - two £100,000 homes in the nearby town of Newton Aycliffe purchased five years ago - was based on extensive research which underpinned the long-term commitment she has made. nnShe said: "This year is likely to be tough and we may see a dip in prices of about five to six per cent." However, she added: "Before I entered the market, I did a lot of research dating back to the 1950s and found that, in general, every ten years the market value doubled and then suffered a slight dip." nnSuch a dip may thus be occurring now, just as there was a small dip in property prices in the mid-1990s and a larger one in the early 1990s recession. In the meantime, however, the rising prices seen in recent years have of course been much more than five or six per cent. Ms Cook's calculation is that the longer-term increase will be as well. nnThe website reported that there were still good buy-to-let opportunities even now in the area, with John Murphy, managing director of Alpha Independent Financial Planning in Middlesbrough recommending the town because of its student population. This may surprise some, since recent tips for property hotspots this year, such as the recent list in the Independent, have tended to exclude the north, with the exception of Liverpool thanks to its 2008 European City of Culture status. nnYet there is still optimism around. Recently the Basingstoke Gazette reported that a Homebuyer and Property Investor Show survey concluded the buy-to-let industry would not just be strong in London and the south-east but also boost the whole UK property industry. nnIf buy-to-let is here to stay for the long run, it looks like it is because its successful practitioners are too. nnIn today's world Property investment is an excellent investment option especially investment in UK