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26 Jun 2013

Investors Turn To Property Again

Investors seem to be directing their attention back to property, and many experts are convinced there might be opportunities for high-yield returns in the market outside London and the traditional prime asset locations.

Specialists claim that property is now back in investors´ portfolios, serving its traditional purpose — diversification. At present, equity markets are extremely volatile and gilt markets provide negative returns. Property is relatively stable, though, with an income of just over 6% and providing a reliable inflation protection, FundWeb reported.

These factors have led to an increased demand for property but, in turn, a spike in prices for prime locations and assets. This is why many property investors prefer to look for alternatives and shift their attention from expensive central London locations - long considered a safe haven for securing returns. Instead, they are now looking for sensible investments in less popular locations where there is a lack of high-quality accommodation.

Another emerging trend is investing in clusters of property occupied by the technology, media and telecoms sector. Such clusters are often found in big cities, including London, or nearby cities traditionally associated with science and technology such as Cambridge and Reading. Experts predict that the technology sector would firmly establish itself as driving force for economic growth in the future, and is currently demonstrating obvious benefits for property. However, investments in such clusters may be inappropriate to investors who value security and quality of prime assets, FundWeb added.

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