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UK residential property fund/ETF

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UK residential property fund/ETF

edited 16 February at 4:53PM in Savings & Investments
2 replies 122 views
buffmanbuffman Forumite
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edited 16 February at 4:53PM in Savings & Investments

We are thinking of moving abroad (possibly permanently) but for the foreseeable future remaining UK tax resident. We will be selling our house in the South East. Originally, we intended to buy a flat in a similar area (since we plan to return frequently to the UK for holidays etc and we have young adult children who may need somewhere periodically to stay). However, I am beginning to be drawn to the flexibility of renting rather than buying.

 My particular concern is that by renting I will be out of the UK property market and miss out on any property price appreciation. This would be a problem if we were to return to the UK and need to purchase a new home.

 To mitigate this risk, I could put some of the proceeds of my house sale into a UK residential property fund or ETF that ideally tracks South East residential property prices (Halifax/Nationwide house price indices would suffice). Does such a fund/ETF exist? Can anyone recommend such a fund or think of other way to achieve this? Thanks

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  • edited 16 February at 6:53PM
    NedSNedS Forumite
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    edited 16 February at 6:53PM
    I'm not aware of anything that specifically sets out to track house prices indices. Take a look at REITs - Real Estate Investment Trusts, which are ITs that hold property and must pay out a minimum of 90% of rental income after costs as dividends. There do not appear to be that many purely residential REITs (I did find PRSR). I vastly prefer REITs to OEICs for holding non-liquid assets such as property, but watch out for those which are heavily leveraged or over burdened with debt. Share price also tends to track sentiment rather than actual market valuations so, for example, some REITs have been trading at significant discounts to NAV recently following brexit and depending on sector.
    You could also consider supplementing with some shares of individual house builders, particularly those with a London/Southeast focus such as Berkeley, but I wouldn't want to be weighted too heavily in any one company.
  • SonOfSonOf Forumite
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    You could consider conventional investments including equities.   Historically, they have kept ahead of property.   So, no need to limit yourself to a niche area with liquidity risks.


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