In the midst of economic uncertainty and political transition, high-net-worth (HNW) investors are poised to significantly increase their stakes in the real estate market.
According to new research by ASK Partners, a specialist property lender, nearly three in five (58%) of these investors plan to boost their real estate investments over the next 12 months, signaling strong confidence in the sector despite looming challenges.
The research identifies life sciences, warehouses and logistics, and co-living spaces as the real estate sectors expected to deliver the best returns in the coming year. This shift in focus comes as traditional retail sector investments see waning interest.
Daniel Austin, CEO and co-founder of ASK Partners, emphasizes, “The positive sentiment towards these sectors is a reflection of the investment prospects we are anticipating due to market demand.”
Challenges on the horizon
Despite this optimism, HNW investors are acutely aware of significant challenges. Higher interest rates, changes in political leadership, increased regulation, and modifications to the tax system are cited as major concerns for the real estate market.
Austin highlights the crucial role of government action in addressing these issues, noting that alleviating restrictions on conversions and brownfield sites, revising zoning and land use policies, and incentivizing affordable housing are top priorities for enhancing investment in UK real estate.
The research underscores a growing dissatisfaction with the current government’s handling of planning restrictions, affordability issues, and the construction workforce shortage. Investors suggest that the upcoming government should focus on these areas to boost real estate investment.
“Housing is a pivotal election issue, linked to economic stability,” Austin asserts. “The UK faces an affordability crisis due to insufficient rental and sale properties, impacting GDP. Addressing these issues could help overcome planning restrictions, affordability challenges, and the shortage of a construction workforce, thus strengthening the UK’s real estate market.”
ASK Partners’ resilience during economic cycles is evident as their loan portfolio recently surpassed £1 billion. Established in 2016, the firm has lent over £1.45 billion across more than 120 transactions, maintaining its reputation as a trustworthy partner.
ASK’s adaptability and innovative real estate finance solutions have positioned it as a leading player in the market. More details about ASK Partners’ offerings can be found on their official website.
As the UK braces for potential political and economic changes, the robust commitment of HNW investors to real estate underscores the sector’s enduring appeal and resilience. Their focus on high-growth areas such as life sciences, logistics, and co-living spaces, coupled with a demand for strategic government interventions, highlights a proactive approach to navigating and capitalizing on the evolving market landscape.
*Research conducted online with 56 HNW investors between May-June 2024
