34% of financial advisers think there will be an increase in interest in UK residential property investment in 2013, according to new research by Castle Trust.
The housing investment and shared equity mortgage provider said the increase forecast for next year builds on growth in 2012 with a quarter of IFAs reporting a rise in clients’ interest in investing in UK residential property other than their home in the past 12 months.
Sean Oldfield (pictured), CEO of Castle Trust, said: “Residential property has historically been a notoriously inaccessible asset class for investors. Most exposure has come through buy-to-let but investors are increasingly aware of the high risk adjusted returns of a housing index compared to other asset classes, including equities, and the benefits this brings to diversified portfolios.
“Investors should view housing as a medium to long-term commitment and fixed-term investments are ideal as they encourage a longer-term perspective. Even buy-to-let investors need to have a three to 10 year outlook to cover the costs of buying and selling. But the returns on a buy-to-let investment depend not only on the sale price but also on the occupancy rate and the cost of maintenance which on average cost an investor £1,532 a year, according to estate agents Northwood.”
The Income HouSA tracks any rise or fall in the Halifax House Price Index and also pays an annual income of between 2% and 3%, depending on the term of the investment.
The Castle Trust Growth HouSA offers a gain of between 1.25 times and 1.7 times any increase on the Halifax House Price Index, or a loss of between 0.75 times and 0.3 times any decline.
