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Alternative, or ‘specialist’, property investments are a growing trend in the UK and across Europe. Experienced investors understand that one of the keys to a successful and sustainable property investment portfolio is diversification, and it is this which has founded the meteoric rise in alternative asset classes.
Broadly speaking, ‘alternative property assets’ refers to property which is considered to be ‘specialist’ to a specific use or industry. These alternative sectors are often characterised by low transaction volumes comparative to ‘traditional’ property like residential buy-to-let, and are driven by long-term cultural, economic or demographic trends.
According to the Savills Alternative Assets Spotlight Guide released earlier this year, the UK is leading Europe in the growth of the alternative asset class, accounting for approximately 47% of transactions in 2015, worth around €10bn. This comes as little surprise given the recent increase in stamp duty charges applied to the traditional buy-to-let property market and upcoming legislative changes substantially cutting the amount of tax relief that landlords are able to claim. As the traditional buy-to-let market becomes less attractive, investors in the UK are widening their scope and moving significant proportions of their portfolios into ‘alternative’ asset classes.
Some of the most popular alternative property options in the UK include hotels, care homes and student accommodation; all of which offer high returns, substantial capital appreciation potential and relatively low capital outlay.
Following the UK’s recent vote to leave the European Union, diversification into these asset classes has become even more attractive. Since the vote, there has been a lot of talk about the potential impact of Brexit on the UK economy and, consequently, the traditional property sector. With demand sources that remain entirely independent from the UK’s EU membership, the care and hotel investment sectors, in particular, provide an increasingly attractive alternative to traditional UK buy-to-let.
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When considering investing in any market it is important to know your facts and figures; and this becomes even more important within emerging markets. The Savills Alternative Asset Guide 2016 includes all of the information you’ll need when considering investing within an alternative asset class. Download your free copy today and find out if this could be the investment opportunity for you.
If you’d like to learn more about alternative property investment opportunities contact a member of our team today on +44 (0)1202 765011 or email [email protected] for more information on our available opportunities.