DevDosh Ltd has covered the topic of the risk versus reward and how this applies to Real Estate Investment Trusts on several occasions the past few months, and how there long term capital management allows fund managers to tackle specialized and often less liquid types of property investment.
The reason people make an investment is for profits and rightly so, but if the investment happens to have a positive effect on the wider economy and socially all the better.
It no secret that the UK is looking at a task of epic proportions in tackling the shortage of housing and crumbling infrastructure, we need all the investment we can get both foreign and domestic.
DevDosh Ltd has seen the markets react to this need in the form of considerable amounts of capital being raised for infrastructure projects, and this is overflowing into the Real Estate Investment Trust sector.
A good example of this is the huge amount of investment funds being poured into PRS (private rented sector).
What we have seen in PRS is a trend of private landlord to target the “young professionals” based in the inner city areas looking for city center apartments. Now while this type of property investment has enjoyed sizable expansion this has led to a distinct lack of family homes.
This undersupply of new housing is a concern as the population of the UK is expected to grow by as much as 10% of the next 15 years, with current lack of affordable properties having such a big impact at the moment this is a huge cause for concern, one the government commented on in its recent White Housing Paper.
The government agreed that they needed to do more to help the institutional investors and create a smoother planning procedure, making the whole UK property development process quicker and easier.
We have seen a situation where lending is harder to come by due the last financial crisis, which in turn means less mortgages issued so more demand for rental properties is created. At the same time changes in tax breaks and stamp duty has seen private landlords fall on tougher times .
- UK private rental sector is worth 1 trillion GBP
- Growth rate of 2.2 million household in the last 10 years
- Expected growth in the next 5 years of 1.1 million (300 billion GBP)
- Current growth rate is only 17 million per annum
With efforts of the institutional investors involved in PRS concentrated on city center apartments and not on family homes outside that of the city center there is an obvious shortfall.
What we need right now is more Real Estate Investment Trusts working with UK property developers to meet this demand.
We need to make it easier for small and medium sized UK property developers to acess the funding they need for these developments, the opportunity to achieve industrial type economies of scale of both construction and maintenance is clear.
UK Real Estate Investment Trust investors can make this a reality while in return diversifying their portfolio and receiving market beating returns.
In DevDosh Ltd opinion, the advantages of getting involved with this type of investment could not be more apparent to the trained and for that matter the untrained eye.
The rewards compared to want could be achieved by the traditional private property portfolio are clear.
If you are an investor and would like to find out more on how you can get involved with a property investment scheme please visit DevDosh Ltd today.