Wind blows in right direction for alternative investment
- Wind investment most popular listing in October 2014
- Student property among top 10 listings for 13th month in a row
- Property schemes provide affordable way to invest in the real estate market
Wind energy fueled activity on TheMoveChannel.com in October 2014. The international investment portal's Investment Watch report reveals that a wind opportunity in the UK received the most enquiries last month, as buyers increasingly turned to alternative investments over traditional real estate.
The senior secure bond, backed by the government, offered investors a return of 9 per cent per annum over a five-year term and 10 per cent per annum over a 10-year term, with its low entry cost of £5,000 whipping up enough momentum to propel it to the top of the Investment Watch chart. It was not the only alternative asset on the list: five of the top 10 most popular listings on TheMoveChannel.com in October were alternative opportunities.
An oil investment in Kansas attracted equally energy-aware investors, with an FCA- approved Escrow account giving access to advertised returns of 43.56 per cent, securing it the sixth biggest response.
The most popular alternative investments were property schemes, which accounted for three of the Investment Watch top 10 listings. A UK fund received the third highest number of enquiries, offering 32.47 per cent returns per annum on £20,000. Another UK fund generated the second highest level of activity, investing buyers' money directly into commercial property and providing returns through rental income and capital growth.
The cheaper the property scheme, the more attractive it was, as investors tightened their belts ready for the winter. Indeed, nine out of the top 10 listings all carried asking prices lower than £100,000, with the three property funds all priced below £20,000.
Student property remains a key driver of activity on TheMoveChannel.com, accounting for two of the top 10 listings. This is the 13th month in a row that a student property listing has appeared in the Investment Watch chart, highlighting its long-term appeal.
£1.13 billion was invested in UK student housing in the first six months of 2014, according to CBRE, 20 per cent higher than the same period in 2013. The strength of the country's sector has been evident on TheMoveChannel.com for some time, with UK cities consistently leading demand. In October 2014, though, a US student property investment outranked a UK opportunity, with pre-tenanted student flats in South Carolina (8 per cent NET for £30,418) receiving the sixth highest number of enquiries, ahead of a Leicester development in eighth place (10 per cent NET for £39,995).
Buy-to-let is also an investor favourite in the UK, with apartments in Manchester receiving the fourth highest volume of enquiries. The popularity of the property is despite its relatively high entry cost of £98,285, a sign that, given the right opportunity, rental income remains the preferred method of property investment.
Only one property listing in October's top 10 was not an investment opportunity: apartments on the Costa del Sol. These luxury units, located in Marbella, were also the most expensive in the Investment Watch chart, with an asking price of £209,093. This, however, was after a discount of 50 per cent from the original price, as market conditions continue to offer opportunities for house hunting bargains. Indeed, the country's presence in a league table otherwise dominated by investments in the UK and USA highlights the resilience and strength of Spain's appeal to lifestyle buyers.
TheMoveChannel.com Director Dan Johnson comments: "As renewed financial uncertainty continues to spread through Europe, increasingly cautious investors are sticking to property in the UK and USA, perceived safe havens where returns and capital growth are considered stable and reliable. Buyers on a tight budget are increasingly turning to property schemes as an affordable way to enter these property markets: it is no coincidence that eight of the 10 most popular listings on TheMoveChannel.com last month were priced under £50,000.
"While the wind is blowing in favour of alternative opportunities, though, Spain's popularity among overseas property buyers is remarkably resilient: the country's low prices and improving economic conditions make it the only lifestyle listing in October's top 10, as well as the only listing in the top 10 worth more than £100,000, and the only listing located outside of the UK and USA. Spanish real estate's enduring appeal has never been more striking."