Why Invest In Below Market Value Assets
All investment markets are cyclical, but at Belgrave Group we believe in the long term performance of property assets. Furthermore, property investments in "United Kindom" are best placed to benefit from infrastructure investment and regeneration to further boost capital growth and a widening yield gap
Compare the characteristics of property investments with financial investments:
The Property Market
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The property market - like any other - is cyclical. Prices do fall e.g. in the early 1990s, property in England fell by 15%
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Property has a 100% record of price recovery
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Property prices have fallen only in 5 out of the last 55 years
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In the first quarter of 2009, house prices are more than three times the level of the early 1990s. (Source: DCLG)
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Taking an aggregate of indicators, UK property prices fell by an average of 12.8% during 2008. (Source: Chesterton Poll of Polls)
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Historically property prices double every 7-10 years. (Source: DCLG)
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Property in a tangible asset
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The fundamentals of property market performance, driven by supply and demand, is simple to understand and monitor.
How Financial Investments Compare
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Stocks also fall e.g. in the 3 months post 'Black Monday' in 1987 the FTSE 100 fell by 33%.
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Since the FTSE 100's last high of 6,939 in Dec 1999, it has still not recovered (reaching a high in September 2007 of 6,752)
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The value of the FTSE 100 fell by 30.1% during 2008 (compared to a fall of 12.8% in house prices)
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The value of UK Pension funds - generally linked to stock market investments - fell by 31.7% during 2008
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Companies can cease trading: Lehman Brothers, Northern Rock, Railtrack, Rover, etc - where 100% of the investment can be lost overnight
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Financial investments are subject to wider volatility than the property market
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Financial investments are often subject to multiple layers of management and transaction fees
Call us on +44 (0)845 463 9357 to discuss establishing, growing or managing your UK-based property investments.