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As the market is showing early signs of improvement, Rayna Hunter, CEO of LH1 Global discusses how the new year will provide alternative opportunities for investors.

Green shoots of recovery for the UK property market are starting to show following recent concurrent drops in inflation levels and a successive run of interest rates remaining stable. This is despite the latest data from the ONS, which revealed that the average UK property price fell by 2% across 2023, whilst Rightmove predict a further drop in prices by 1% in 2024.

Whilst reports of value decline are never an attractive prospect for investors there are still plenty of alternative options available that are seeing record returns. Two of the fastest growing investment markets that we’re currently seeing the highest level of transactions for are short lets and government-supported assisted living new homes.

Offering an opportunity for investors to diversify their portfolio and make an ethical choice, assisted living homes are an incredibly smart investment choice compared to other real estate ventures, as these unit types consistently outperform current market limitations, rendering strong returns and high yields due to long-term tenancies and rental payments via the local authority.

Assisted living developments provide essential high-quality secure housing for those with mental health conditions and disabilities, however, there is a need for private investors to acquire these units and provide the funding to ensure housing associations can operate successfully.

Private investors can and will play a huge role in delivering the multi-unit developments we need to truly meet demand. There is an opportunity for investors to benefit from these excellent returns and this is what will be enticing for some but there is also the chance to be behind something that really makes a difference.

The key benefits to investors in assisted living homes include:

  • Starting NET yield of 10%
  • Upward only Annual Rent Review (CPI + 1% Linked)
  • Secure tenancies with no void periods
  • Absence of Service Charge commitment
  • No maintenance costs

The team at LH1 Global has overseen successful completions at multiple Assisted Living developments across the UK in 2023 and we have several new project launches in 2024 that will see this alternative property investment grow in prominence in the new year.

Another alternative property investment portfolio that has seen exponential growth is the short-term rental market. High demand for rental properties and a drop in the sales market have resulted in a surge of interest for short-term lets, in turn providing investors with exceptional returns, with average yields ranging between 12-20%.

Homes with short let potential have played a significant role in supporting the buoyancy of the UK housing market since the pandemic, with their popularity driven due to factors such as tourists requiring larger accommodation while visiting for an extended period of time, whilst they are also useful for those on a corporate stay/temporary secondment or homeowners seeking an alternative residence while renovations or refurbishments are taking place at their principal accommodation.

Short-term rentals have reshaped the housing landscape, offering landlords an investment that ensures greater freedom, flexibility, and higher profits compared to traditional long-term buy-to-lets. Within a constantly evolving market, investors are being drawn towards alternative investments and are particularly attracted to properties within purpose-built developments that offer management, security and ultimately peace of mind.

We’re currently marketing multiple strong-performing properties across the UK that are providing investors with high returns, offering an exceptional opportunity for those seeking to expand their property portfolio, with units available in developments in Merseyside, Bradford, Cheltenham and Manchester.

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