23 Aug A Way Through the Property Maze
Perhaps inevitably, concerns about the potential economic impact of Brexit – coupled with the immediate reality of rising prices and relatively stagnant wages – have raised fears that the UK is facing another correction in property prices.
Predictions of a sharp fall in house prices are clearly a source of concern, not just for investors in the residential market, but for all those who have bought into property in recent years.
The truth is, however, that despite occasional corrections in the market, property continues to be an asset that offers solid returns across the medium and long term. Equally important, for an investor that is already exposed to equities and bonds, property offers a means to hedge against market risk by diversifying into another asset class.
In a comprehensive report on the residential property market in 2013, the British Property Federation put average annual returns from residential property investments at 9.6% compared with 6.9% from the commercial property sector. As BPF pointed out, residential property, in particular, was at that point outperforming stocks and gilts. In subsequent years, returns on residential rose as high as 12%. The residential buy- to-let, is by far and away the most favoured asset class.
A Complex Market
But the property market – and the opportunities it presents to investors is complex. Beyond the simple distinctions of residential and commercial, the real estate ecosystem is home to a large number of sub-sections. Technically speaking, these include not only residential homes for sale, residential homes for rent, retail, industrial and commercial, but also categories such as student accommodation, farmland, forestry and (to be really niche) data centres. All have their own dynamic and performance characteristics.
Geography also plays a part in determining the value of investment. On the face of it, the potential for high returns might be greater in a region where the economy is booming than in an area where activity is depressed. However, it’s also true that there are opportunities in areas where ‘distressed’ assets become available.
To complicate matters further, there are many ways to buy into property, ranging from a direct personal investment through to real estate investments trusts focused on both the residential and commercial sectors.
Knowing Where to Invest
For a high net worth investor (HNWI) seeking to maximising returns, the challenge lies in identifying the best available opportunities.
That’s the point at which property can seem like a maze. There are a great many options in terms of investment classes, geography and investment vehicles. In one respect, choice is a good thing, but a profusion of choices can obscure – or make it difficult to find – opportunities offering above average returns.
The Route – City wealth club
The Route – City wealth club is making investment in residential/buy-to-let property easier.
Established to provide 360 degree investment advice and opportunities to Members, The Route – City wealth club’s range of services include tax advice, financial planning, opportunities to invest in business loans through a Private Debt Platform and property investment.
The Route’s team of property advisors have an unparalleled knowledge of the UK market and can provide bespoke solutions, tailored to the requirements of individual members. The core of the offer is a Buy-to-Let Property Portfolio service, which enables Members to select from opportunities ranging from new developments through to tenanted flats or houses – often available as ‘distressed’ sales. The investments can be executed via cash, SIPP monies and company deposits. These opportunities are often exclusive to The Route, and therefore, to our Members.
In addition, The Route provides access to a range of borrowing solutions, such as mortgages (including multi-currency) and portfolio loans. Again, these are exclusive to Members.
By investing in property, Members can take advantage of reliable rental incomes but in addition, The Route can advise on forward sales. Our target is a return of 15%.
Property investment offers huge opportunities. The Route – City wealth club aims to ensure that Members have access to the best opportunities available. There is no need to get lost in the property maze.
Find out more by telephoning The Route on 020 3141 9040