The UK residential sector is fast proving its worth as a strong source of long-term income for institutional investors. As one of the leading investors in the UK private rented residential (PRS), M&G Real Estate combines residential expertise with commercial experience, taking a professional and institutional approach to the sector to minimise costs and maximise returns.
We believe UK PRS will prove particularly resilient to any short-term volatility in the UK property market following the referendum vote to leave the European Union. The sector has proved its defensive characteristics during the steep market downturns in both the 1990s and 2000s, when residential property recorded a smaller capital decline than commercial and also recovered its initial value faster.
People will always need somewhere to live and economic uncertainty is likely to encourage more of them to rent rather than buy, which in turn should support rental values.
Top five reasons to invest in UK residential:
- Track record of strong, risk-adjusted returns
- Diversification benefits versus both commercial real estate and other asset classes
- Defensive characteristics in case of an economic downturn
- The long-standing demand/supply imbalance in the UK housing market, fuelled by one of the fastest population growth rates in Western Europe
- Scope for professional investors to add value through active management and economies of scale
The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested.