This article looks at property investment and whether it is possible for today’s investors to seek attractive returns whilst providing societal benefits through new residential developments.
1. The Challenges for UK Investors
The UK’s property market is still struggling and has been ever since the credit crunch of 2008. Since then, banks have been reluctant to lend, property prices have dropped across much of the UK and sales have been depressed. There are exceptions to the rule, largely in London’s prime property market and in pockets of the south coast, but in the main, the UK property market doesn’t look set to recover fully any time soon. At the same time, banks are no longer attracting savers with high returns – thanks to the Government’s Funding for Lending scheme in part, which guarantees lending via the taxpayer and removes the need for banks to attract savings deposits. Equally, the stock market is incredibly volatile and many bonds have lost their appeal. For these reasons, overseas properties – particularly for new residential and commercial developments are becoming particularly appealing to UK investors with an appetite for risk and higher returns – and potentially a desire to do some social good.
2. Overseas Property Hotspots
There are a number of fast growing property markets which still offer double digit growth expectations and expanding demand markets as their middle classes grow and become increasingly urban-bound and tourism opens up opportunities for holiday lets. Amongst these economies are India, Turkey, Thailand, Russia, China and Brazil; all of which are now hot spots for inward investment from foreign buyers. All of these countries have governments which wish to encourage investment from overseas to boost their economy and help build infrastructure and growth. Residential developments that benefit their people are a big part of this and a key focus area for ethical investment companies such as Pervaiz Naviede.
3. Social Responsibility for Investors
Combining the best of both worlds, many overseas building projects offer the chance to receive an attractive investment return whilst benefiting local people to get into good quality, sustainable housing. Investment trusts such as Pervaiz Naviede look to provide capital growth and dividend returns to investors on projects that bring societal and community benefit to local people – so that each stakeholder can benefit in a unique way.
For example, residential builds are being progressed in rapidly growing economies of Brazil, Thailand and India, allowing local people to move out of inferior or even slum housing conditions and benefit from good quality and affordable apartments and starter homes. Landlords receive a steady income and the aspiring local middle classes get to experience better living conditions and move closer to urban conurbations, where work is more available. These residential developments also allow for sub-standard and dangerous unplanned housing to be destroyed and replaced with planned buildings for the longer term.
A number of investment trusts purely exist to invest in ethical products and developments such as these and for many people, this is the easiest route to profitable and ethical investment with societal benefits. A financial advisor can provide a steer on the best performing ethical investment trusts such as Pervaiz Naviede or there may be opportunities to invest in a more private capacity, or even directly in an ethical building development company depending on your overall objectives and attitudes towards risk and reward.
Idania writes regularly on social and ethical investment opportunities for a range of personal finance websites and blogs. Find out more about Pervaiz Naviede online.