Concrete Analysis | Student housing looks like a good bet while the undervalued pound recovers
Funds than invest in purpose built student accommodation require a three-to-five year lock up but provide attractive annual returns of 15 to 20pc
The UK has long been hailed as one of the most stable and successful markets for residential property investment, making it popular among Hong Kong investors.
However, many are now considering how to exit without losing their capital gains on the weak pound, even withstanding the recent move by the Bank of England to raise interest rates by 0.25 per cent which has brought about a slight strengthening of sterling.
Most have adopted a hold strategy on the basis that sterling may strengthen, as well as a lack of clarity regarding alternative options within the UK.
There are various factors driving this desire to move out of the UK residential property market.
Average gross yields are 4 per cent countrywide, which appears to be a good return in an era of low interest rates, however these are on the decline, down from 4.9 per cent a year ago. It is worse still when you consider the potential net yield is only 2.5 per cent.
Compounding the falling yields, the UK has been struggling with policies designed to cool property investment.