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Asset Class

How Has UK Residential Property Performed as an Asset Class?

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Hello, you’ve reached the Experience Invest blog. Here, we work to deliver you the latest UK residential and commercial property sector news. Read on to find out what recent data has shown on how UK residential property has performed as an asset class over the past 20 years.

Market in 2015

The BBC reported that figures from lender Halifax suggest that UK house prices increased by 9.5% last year, the fastest annual increase in nine years. Halifax economist Martin Ellis argued that this was driven by a continuing shortage of available property in the UK, adding that “this situation is unlikely to change significantly in the short term, resulting in continuing upward pressure on prices” in 2016.

Meanwhile, data from the Office for National Statistics (ONS) shows that UK rental values increased by 2.5% in 2015, meaning they’ve risen consistently year-on-year since 2012.  The rate of rental growth was highest in England, where average rents expanded by 2.7% in 2015. Scotland followed at 0.9% and Welsh rents expanded by 0.7% last year.

Long-term returns

A new study from property crowdfunding platform Property Partner has shown how the UK’s residential property market has performed over the past two decades. The Property Partner Residential Market Index focused on UK residential property’s performance as an asset class.

The Index found that residential property provided investors with less risk than gold, which is traditionally considered a safe asset class for investors. Also, Property Partner suggested that property investment in England and Wales significantly outperformed other asset classes in the last 20 years. Meanwhile, the figures showed that £100 invested in London’s housing market 20 years ago is worth 10 times as much in 2016, while it would be worth £600 if invested in English or Welsh housing.

Furthermore, Property Partners found that rapidly increasing house prices in London and the South-East of England have reduced yields for investors operating in these markets. Specifically net yield for buy-to-let landlords in London fell by 2.7% in the year to November 2015, but buy-to-let landlords in the North-East of England are now seeing an average yearly net income of 4%.

Experience Invest

Experience Invest is a London-based independent property company specialising in residential investments, student property and care home investments. The company operates across the UK and internationally, and is regularly featured in the property news – see The Telegraph, on Yahoo Finance, and by Reuters for examples of recent articles.

Experience Invest works with a range of clients, from first time investors to high-net worth individuals, offering them unique access to properties not always available to individual investors.