Investors have ‘lost faith’ in bricks and mortar

Retail investors are increasingly choosing alternative ways of investing in real estate beyond owning physical property, according to new research. A survey by Assetz Capital has found 70% of current investors don’t hold bricks and mortar, while 91% haven’t held property in the past five years. Stuart Law, chief executive of Assetz Group, said: “It appears that buy-to-let died some time ago and we are truly in a new age defined by more modern, flexible and hassle-free methods of real estate investing.” Assetz’s data suggests investors are attracted to alternative opportunities including peer-to-peer secured lending, crowdfunding and fractional property investment to make their money work harder as relatively low interest rates, combined with rising living costs, means saving continues to be unattractive. More than half (54%) of Assetz Capital’s investors are looking to increase the size of their overall investment portfolio next year, while 33% plan to stay at the same level. Some 67% of the 1,171 Assetz investors polled said the main reason for investment was that it offers the potential for a better return than savings. At the same time, 16 % said the primary reason for investing was to provide alternative ways fund their retirement. The top three challenges cited in owning and investing in bricks and mortar were the hassle and time required to manage the properties (43%), the costs associated with maintenance and refurbishment (38%) and increasing costs due to government regulation (35%). Some 59% said they were also placing increasing importance on the social and environmental impacts of their alternative real estate investments. Law added: “As it stands, the current financial system is broken. Savers may struggle to get a fair return on their deposits, while businesses can’t get the funding they need to grow.”   To send feedback, e-mail akanksha.soni@eg.co.uk or tweet @asoni7185 or @EGPropertyNews