According to the latest Owner Managed Business (OMB) Barometer from Bank of Cyprus UK, 70% of OMBs believe that land allocated for residential property development will deliver the greatest return on investment in 2016.
When asked about their own personal investment preferences, more than half (52%) of the respondents considered residential property to be the most attractive option, when compared to other asset types.
The barometer findings reveal that just 13% of OMBs believe land used for shops/retail will deliver the greatest return in 2016. Similarly, stocks and shares, cash, pensions and commercial property all ranked far lower than residential property as investment choices for OMBs. This is despite the Chancellor’s recently announced changes to the buy-to-let market.
From April 2016, buy- to-let investors in England and Wales will have to pay a 3% surcharge on each stamp duty band, in addition to the personal rate of tax relief for landlords being cut from 40% to 20% in April 2017.
Commenting on the research findings, Lakis Kasapis of Bank of Cyprus UK said: “We know from experience that OMBs are very committed to property as their preferred destination for longer-term investment. It is therefore not surprising that despite the clampdown on landlords announced by the Chancellor in the last two Budgets, OMBs still see the residential property market as an attractive investment opportunity.
“However, it remains to be seen whether we experience a rush to buy from potential investors in the first quarter of this year, before the stamp duty increase takes effect in April. Instead, we may see investors waiting in the wings as they assess the potential fall-out resulting from the recently announced tax changes.