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Are property investments with strong yields that grow with inflation too good to be true?

Soaring oil prices, high inflation, and changes in the buy-to-let regulatory landscape have significantly changed the financial environment we enjoyed for much of the last ten years. Whilst higher interest rates have put the shine back on cash products, the volatility of the stock market has not necessarily delivered better returns. The addition of alternative assets to one’s portfolio can help mitigate these ups and downs.

For a number of years, buy-to-let has been how many investors have provided diversification to their investment portfolio, cushioning  stock market turbulence by investing in the UK property market. However, with changes to tax breaks and legal obligations on landlords, today’s buy-to-let industry looks less attractive. Instead, those seeking exposure to the housing market and a way to spread their risk by building up a diversified property portfolio are increasingly looking to property platforms like Assetz Exchange.

What can such a property platform offer investors?

Easy asset diversification

There are over 50 properties on Assetz Exchange, each split into units of around £1. Each property has an exchange (hence the name), making allocating funds across a range of properties easy. It is therefore quick and simple to spread your funds across multiple properties, at the same time as ensuring this important alternative asset class is included in a diversified portfolio.

Attractive yields of up to 6.27%

The properties on Assetz Exchange deliver yields of between five and seven per cent. Critically, they are leased to housing associations, non-profits, or large charities such as Nacro, Golden Lane Housing, and Halo Housing. These firms are high-quality and reliable tenants often with long histories of fulfilling government contracts, and due to the nature of their clients, the rent of each property is dependably paid out of housing benefits claimed directly from local authorities.

Furthermore, the yields are stable as the properties are not purchased using mortgages, thereby mitigating any worries that net rental income will be eroded by higher interest rates. 

Long-term inflation-linked leases

Not only does Assetz Exchange lease the properties to high-quality counterparties, but they also benefit from long-term inflation-linked leases that run for between five and ten years. Whilst this compares favourably with standard buy-to-let Assured Shorthold Tenancy (AST) leases, in practice they are even longer as the properties essentially provide a home-for-life for many of the occupants. 

Stability from being backed by UK property

Despite various economic shocks – the Great Recession, Brexit, and a global pandemic over recent years – demand for housing still outstrips supply in the UK. On an aggregate basis, this should underpin house prices and deliver long-term capital growth

Without the hassles and obstacles of buy-to-let

Creating a diversified buy-to-let property portfolio is not for the faint hearted. The venture requires expertise, a lot of time and money, and the patience to handle midnight calls about broken boilers or leaking roofs. On top of this, landlords have had to grapple with both a reduction of tax incentives and an increase in legal obligations. Is it any surprise then that landlords are selling up?

However, this does not mean that buy-to-let no longer has a place in a portfolio. This alternative asset class delivers long-term income with rent received monthly, there is potential capital growth, and it isn’t directly correlated to the stock market. Assetz Exchange provides the advantages of buy-to-let without the headaches.

The platform takes on the responsibility and administrative burden of purchasing and maintaining the properties, with investors able to enjoy all the benefits listed above from a relatively limited outlay. Moreover, buying and selling is a breeze compared with buy-to-let in its traditional form.

0% commission on trades and transparent low fees

Assetz Exchange does not charge investors a commission to buy or sell their fractional property investments on the exchange, and the fees charged are transparent and comparatively low, so investors face little earnings erosion on their property investments on the platform.

Investments that qualify for IFISA and SSAS 

The contracts through which investors invest in the properties are structured as Article 36H loans. This means that they qualify for both the Innovative Finance ISA and SSAS Pensions. Assetz Exchange, therefore, provides a tax-efficient means to invest in UK residential property.

A positive societal impact

Assetz Exchange works directly with charities, care providers and housing associations that provide supported accommodation to a wide range of vulnerable people. Your investment enables these organisations to provide long-term housing solutions and give vulnerable people a place to call home.

If you are ready to enjoy the benefits of attractive yields from diversified investments backed by the UK property market, sign up now.


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