But house price volatility expected to be lower, research shows
Investment advisers are forecasting stock market volatility will continue to be above historical averages for at least the next five years, new research1 from financial services company Castle Trust shows.
Its national study of investment advisers found 68% predict that volatility will remain above historical averages for the next three years, dropping slightly to 62% over the next five years.
Only when it comes to predicting volatility over the next ten years does the percentage forecasting above average volatility drop below half of advisers – and even then 46% expect volatility to remain high.
By contrast, the research shows around two-thirds of investment advisers believe house prices will continue to be less volatile than equities over three, five and ten years. Over the next three years, 68% say house prices will be less volatile, while 67% expect this over five years and 66% over ten years
Castle Trust has launched with two new investment products that will enable millions of people, many of whom don’t own their own homes, to invest in the UK housing market without having to buy a property.
Sean Oldfield, chief executive officer, Castle Trust said: “The UK housing market has provided excellent risk-adjusted returns over the years, with average annual returns of 3% above inflation over nearly three decades. House prices and household incomes are inherently linked over the long term, providing investors with a good inflation hedge.
“Housing is the UK’s largest asset class, worth over £4 trillion which is more than the FTSE All-Share, commercial property, corporate bonds and gilts combined.
“Our HouSAs enable investors to access the returns of national house prices without the risks or volatility attached to owning a property while also enabling people to save for their first home.”
Castle Trust’s HouSAs offer income and growth investment products linked to the Halifax House Price Index with returns that beat the Index, whether it rises or falls.
The two new investment vehicles can be taken out for terms of three, five or ten years and qualify for investment in ISAs, Junior ISAs and SIPPs. Minimum investment is from just £1,000 and there are no annual management charges. An initial fee of up to 3% of the investment is payable, depending on the terms clients agree with their financial adviser.
The Castle Trust Income HouSA tracks any rise or fall in the Halifax House Price Index and also pays an annual income of between 2% and 3%, depending on the term of the investment.
The Castle Trust Growth HouSA offers a gain of between 1.25 times and 1.7 times any increase on the Halifax House Price Index or a loss of between 0.75 times and 0.3 times any decline.
The benefits of HouSAs are:
• Returns are better than the Halifax House Price Index whether it rises or falls
• Tax free investment options
• You can invest from as little as £1,000
• An alternative to a buy-to-let investment but without the hassle or ongoing costs
• They open up the housing market for investors without the need to buy a property.
|
