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Pension-Friendly – The Route’s ‘Property Loan Note’ Broadens Property’s Appeal

The UK residential property market not only represents a reliable and low risk investment over the long and medium term, it is also hugely versatile in terms of the aligning with the goals of individual investors.   

Alone – or preferably as part of portfolio of assets – an investment in the buy-to-let market can generate income over the short, medium or long term. And as property values generally outrun inflation, ownership provides a means to preserve and grow wealth. In addition, value-add projects such as renovation can often produce high returns over relatively short periods when the property in question is bought and resold.

Arguably property is at it’s most attractive when viewed as a long-term investment. The market may fluctuate and fall over the short term, but the long-term trend on values and rent has been inexorably upwards. And with demand outstripping supply, this is likely to continue.  

In that regard, property is an ideal investment for those seeking to allocate retirement income or savings. Recognising that retirement and tax planning are often hugely important goals for those planning to invest in property, The Route – City wealth club has introduced a pension-fund-friendly Property Loan Note to add a more flexibility to an already attractive Property Portfolio Service offer.

In for the Long Haul

There are, of course some question marks hanging over the property sector at the moment. With Brexit talks still mired in issues such as the UK’s final financial contributions, the Irish border and citizens’ rights, substantive talks on trade are unlikely to make serious progress (or even begin) for some time and no one can say with any certainty what a ‘no deal’ scenario would mean for the UK economy. Any Brexit-related downturn would undoubtedly hit the property market.  

Equally clear and present is the perceived danger that in parts of the UK – particularly London and the South East – the property market is overheating. For investors, there are two issues here. One that, an economic downturn or even a change in sentiment will result in the collapse of the current property bubble, leaving investors with negative equity and perhaps also struggling to secure a suitable level of rental income. But even if that doesn’t happen, rising property values make it more expensive to invest at a time when sluggish wage rises are limiting the amount of money that tenants can afford to spend on rent – a situation that potentially reduces returns.

These are, of course, natural concerns, but the continued imbalance between demand and supply suggests that any downturn in property values will be a temporary correction. Equally important, the rental sector continues to grow. Rental values across the UK now total £1 trillion.   

High values in London remain an issue, but one of the key functions of the Property Portfolio Service (PPS) is to look at opportunities UK-wide. Outside London, there are abundant  opportunities to secure above- average return and our experts can often find exclusive deals for City wealth club members.   

The Property Loan Note

Until recently, the Property Portfolio Service has been limited to cash investments. This has meant that Route City wealth club members were unable to allocate money from their pension funds to opportunities available through PPS.

Recognising that this has been perceived as an obstacle, The Route has developed a solution in the form of a Property Loan Note, designed to comply with SIPPs regulations and thus free up Members to use money from their pensions to invest through PPS.

This is an important development. The Route is constantly finding high yield investments for Members. The Loan Note opening up new options for those who wish to take advantage of the unique deal flow on offer. Property is already attractive. The Property Loan Note widens its appeal.

To find out more, telephone The Route on 020 3141 9040

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