{"id":2003,"date":"2016-06-13T06:30:17","date_gmt":"2016-06-13T05:30:17","guid":{"rendered":"https:\/\/blog.propertypartner.co\/?p=2003"},"modified":"2020-10-22T14:49:51","modified_gmt":"2020-10-22T13:49:51","slug":"is-residential-the-ultimate-asset-class","status":"publish","type":"post","link":"https:\/\/www.londonhouseexchange.com\/blog\/is-residential-the-ultimate-asset-class\/","title":{"rendered":"Is residential the ultimate asset class?"},"content":{"rendered":"\n<p><strong>Best performance, lower risk: Is residential the ultimate asset class?<\/strong><\/p>\n\n\n\n<p>Let\u2019s play a game of hindsight. Step back twenty years&#8230;if you had invested \u00a3100 into four of the major asset classes, how much do you think you would have now? Our data shows that \u00a3100 invested in London\u2019s property market twenty years ago would be worth \u00a31195 today. This compares to:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>\u00a3728 for property in the South-East<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>\u00a3608 for property across England and Wales<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>\u00a3473 for the FTSE All Share index<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>\u00a3299 for gold<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>\u00a3224 for cash savings<\/li><\/ul>\n\n\n\n<p><strong>\u2018Best performance\u2019: twenty years of total returns<br><\/strong><\/p>\n\n\n\n<p>In a marathon race of returns, the graph below shows just how far residential has outstripped the rest over the past twenty years. Moreover, this is without taking into account the amplified returns that many investors will have seen through gearing, or mortgaging, their properties.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><a href=\"https:\/\/www.propertypartner.co\/blog\/wp-content\/uploads\/2016\/09\/pasted-image-0.png\"><img decoding=\"async\" src=\"https:\/\/www.propertypartner.co\/blog\/wp-content\/uploads\/2016\/09\/pasted-image-0.png\" alt=\"crossrail-centra-section-1\" class=\"wp-image-87\"\/><\/a><\/figure><\/div>\n\n\n\n<p><i><small>Click image to enlarge<\/small><\/i><\/p>\n\n\n\n<p>Residential property investment in England and Wales has delivered an annual total return of 9.34% on average over 20 years. Total returns vary widely across regions &#8211; with London offering lower income and higher capital growth, versus regions outside London where the balance is more even, or the opposite is true. For example in 2015 net yields averaged just 2.7% in London, versus 4% in the North-East.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><a href=\"https:\/\/www.propertypartner.co\/blog\/wp-content\/uploads\/2016\/01\/Annualisedcapreturnjan12.png\"><img decoding=\"async\" src=\"https:\/\/www.propertypartner.co\/blog\/wp-content\/uploads\/2016\/01\/Annualisedcapreturnjan12.png\" alt=\"crossrail-centra-section-1\" class=\"wp-image-87\"\/><\/a><\/figure><\/div>\n\n\n\n<p><br><i><small>Click image to enlarge<\/small><\/i><\/p>\n\n\n\n<p>Over time we also see the impact of increasing property prices in London and the South-East squeezing investor yields in these regions.<br><br><\/p>\n\n\n\n<p><strong>\u2018Lower risk\u2019: a hedge beyond the garden<br><\/strong><\/p>\n\n\n\n<p>If you thought your investments were safest in gold\u2019s warm embrace &#8211; you were beguiled. Unless you\u2019re willing to settle for a disappointing relationship with your savings account, residential property comes solidly second as the next lowest risk investment. See below:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><a href=\"https:\/\/www.propertypartner.co\/blog\/wp-content\/uploads\/2016\/01\/Riskreward12thJan.png\"><img decoding=\"async\" src=\"https:\/\/www.propertypartner.co\/blog\/wp-content\/uploads\/2016\/01\/Riskreward12thJan.png\" alt=\"crossrail-centra-section-1\" class=\"wp-image-87\"\/><\/a><\/figure><\/div>\n\n\n\n<p><i><small>Click image to enlarge<\/small><\/i><\/p>\n\n\n\n<p>Residential represents a lower risk investment, with higher rewards &#8211; it\u2019s a real asset of bricks and mortar, and brings in rental yield. Furthermore, residential acts as a strong hedge against wider volatility in the market, as the drivers of supply and demand in the housing market are not closely correlated to the performance cycles of other assets.<\/p>\n\n\n\n<p>There could be no better evidence of this than during the Global Financial Crisis. From its peak in February 2008 to its trough in April 2009, residential property in England and Wales fell 14%. The FTSE All Share total returns index, which peaked in February 2007 and bottomed out in February 2009, fell 41%. While gold served as a safe haven during the Global Financial Crisis, in the longer term it has proven volatile, and significantly underperforms residential property.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><a href=\"https:\/\/www.propertypartner.co\/blog\/wp-content\/uploads\/2016\/01\/Totalreturnbyassetclass12Jan.png\"><img decoding=\"async\" src=\"https:\/\/www.propertypartner.co\/blog\/wp-content\/uploads\/2016\/01\/Totalreturnbyassetclass12Jan.png\" alt=\"crossrail-centra-section-1\" class=\"wp-image-87\"\/><\/a><\/figure><\/div>\n\n\n\n<p><i><small>Click image to enlarge<\/small><\/i><br><br><\/p>\n\n\n\n<p><strong>Conclusions: Improving on the past<br><\/strong><\/p>\n\n\n\n<p>Our Director of Property, Robert Weaver, often describes residential property as \u2018the ultimate asset class\u2019. With the best performance, at the lowest risk, it seems he could be justified. However, the \u2018ultimate\u2019 of residential investment has been exactly that &#8211; a distant prospect, inaccessible or inconvenient for all but a few investors, blessed with significant time and money to invest in the asset class.<\/p>\n\n\n\n<p>The arrival of Property Partner has opened up this asset class to everyone. Finally, people can invest in residential property in a more accessible way, building a diversified portfolio at the click of a button, and all without the usual hassle of mortgages, solicitors and maintenance.<\/p>\n\n\n\n<p>Ready to begin your residential property portfolio? Start with one, keep building, and you could have properties everywhere. Take a look at our Marketplace to start investing.<\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div style=\"text-align: center; margin: auto; width: 100%;\">\n<div style=\"text-align: center; margin: 10px auto;\"><a style=\"font-size: 15px; font-family: 'Lato' Helvetica, Arial, sans-serif; font-weight: bold; text-align: center; color: #ffffff; text-decoration: none; background-color: #44d371; border-top: 12px solid #44d371; border-bottom: 12px solid #44d371; border-left: 24px solid #44d371; border-right: 24px solid #44d371; border-radius: 4px; -webkit-border-radius: 4px; -moz-border-radius: 4px; display: inline-block; letter-spacing: 1px;\" href=\"https:\/\/www.propertypartner.co\/s#\/featured-view\">View properties<\/a><\/div>\n<\/div>\n\n\n\n<p>We\u2019re building a better way to invest in buy-to-let, and investors are not the only ones who benefit. Learn more about how we\u2019re building <a href=\"https:\/\/www.propertypartner.co\/blog\/better-than-buy-to-let\/\">a way to invest in property that is better for everyone<\/a>.<\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p> <strong>Capital at risk.<\/strong>&nbsp;The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Past performance is not a reliable indicator of future performance. Forecasts, if stated, are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. 5 yearly exit protection, exit on platform, exit in line with a specific investment case or fund strategy, subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See&nbsp;<a rel=\"noreferrer noopener\" href=\"https:\/\/help.propertypartner.co\/hc\/en-us\/articles\/360004054894-Key-Risks\" target=\"_blank\">Key Risks<\/a>&nbsp;for further information. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Best performance, lower risk: Is residential the ultimate asset class? Let\u2019s play a game of hindsight. Step back twenty years&#8230;if you had invested \u00a3100 into four of the major asset classes, how much do you think you would have now? Our data shows that \u00a3100 invested in London\u2019s property market twenty years ago would be [&hellip;]<\/p>\n","protected":false},"author":14,"featured_media":10660,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,164],"tags":[172,194,173,195,191,175,196,178,179,180,176,193,174,177,182],"class_list":["post-2003","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-education","category-property-investment-information","tag-buy-to-let","tag-buy-to-let-guides","tag-crowdfunding-platform","tag-how-to-invest-in-property","tag-property","tag-property-crowdfunding","tag-property-education","tag-property-exchange","tag-property-experts","tag-property-funds","tag-property-investment","tag-property-investment-guides","tag-property-investment-platform","tag-property-market","tag-property-partner"],"_links":{"self":[{"href":"https:\/\/www.londonhouseexchange.com\/blog\/wp-json\/wp\/v2\/posts\/2003","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.londonhouseexchange.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.londonhouseexchange.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.londonhouseexchange.com\/blog\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/www.londonhouseexchange.com\/blog\/wp-json\/wp\/v2\/comments?post=2003"}],"version-history":[{"count":43,"href":"https:\/\/www.londonhouseexchange.com\/blog\/wp-json\/wp\/v2\/posts\/2003\/revisions"}],"predecessor-version":[{"id":10903,"href":"https:\/\/www.londonhouseexchange.com\/blog\/wp-json\/wp\/v2\/posts\/2003\/revisions\/10903"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.londonhouseexchange.com\/blog\/wp-json\/wp\/v2\/media\/10660"}],"wp:attachment":[{"href":"https:\/\/www.londonhouseexchange.com\/blog\/wp-json\/wp\/v2\/media?parent=2003"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.londonhouseexchange.com\/blog\/wp-json\/wp\/v2\/categories?post=2003"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.londonhouseexchange.com\/blog\/wp-json\/wp\/v2\/tags?post=2003"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}