Investec Real Estate is a major lender to institutional investors acquiring UK property. In its recent Future Living report it finds that residential property has emerged a clear winner from the current pandemic.
The UK has long been seen by international investors as a safe haven, with property high on the list of preferences. Investec surveyed 52 of their largest global clients, collectively accounting for £500 billion of assets under management.
In their report "Beds for Rent: A Golden Age" they found that UK residential investment has become a core investment strategy, with the amount invested in the sector up by 60% since 2019.
Over 40% of the respondents are very positive on UK residential investment, stating their intention to increase their investments in the sector. A further 40% intend to keep their exposure at the current level.
The number of investors committing over £1 billion to the sector is expected to increase five-fold over the next five years.
Investors quoted the stability and reliability of residential property and its long term defensive qualities. High occupancy and collection rates have been highlighted in the current crisis.
Some parts of the real estate world are better suited to track inflation: the only sector where rents have tracked inflation over the long term is residential.
Of course, the big institutions do not buy houses or apartments. They buy entire blocks. However, the message is clear. Residential property is becoming an increasingly attractive investment class and has an important place in any portfolio, large or small.