This challenge has become more apparent in recent years after the Brexit vote and the pandemic, when investors withdrew their money over fears of a property crash.
By comparison, closed-ended funds such as real estate investment trusts (Reits) do not suffer from a liquidity mismatch, as they have a fixed pool of capital that is not affected by investors buying and selling.
In terms of funds to buy, Ms Admans recommended CT TR Property Trust which is mainly invested in listed property shares, with physical property accounting for a maximum of 15pc of the portfolio.
The geographic split is 25pc to 50pc UK, with the remainder in Europe. It is currently trading at a discount of 7pc to net asset value.
“The manager, Marcus Phayre-Mudge, has deep sector experience and has built up a strong track record of generating income using a differentiated approach to property investing,” Ms Admans added.
John Moore, of wealth manager RBC Brewin Dolphin, recommended PRS Reit which invests in new-build family homes for the private rental market.
“Even though it is one of the scale players in the sector, it only manages 5,000 units, which is a drop in the ocean of [the Government’s] 300,000 per year new homes target – so there is huge room for growth,” he said.
“Yet the share price has not reflected any of that – it trades at a substantial discount to net asset value and offers a yield of more than 4.5pc.”
In addition, Ms Admans tipped Finsbury Global Property and Schroder Global Cities Real Estate. Both are open-ended funds, however they invest in Reits and listed property companies, removing the liquidity risk.
Shares in property companies
There is a chronic shortage of housing in the UK, and it could be wise to invest in companies that are working to address this issue.
Vistry and Persimmon are among the housebuilders who stand to benefit from the pledge to build more housing. Mr Moore said: “There has been a lot of movement in Vistry’s share price since interest rates picked up – even by the sector’s standards.
“But it should be in line to benefit as greater efforts are made to reform the planning system and provide more affordable housing, while offering a yield of nearly 6pc in the meantime.”
A member of the Barclay family has called in estate agents to sell off more than 100 properties on Sark, as part of efforts to raise cash under the threat of bankruptcy.
Alistair Barclay, 34, has enlisted Knight Frank as he races to pay down debts.
It comes as Mr Barclay, the youngest of Sir David Barclay’s sons, faces the threat of bankruptcy in Britain after he was hit with a petition from a leading private bank.
The family has said the court action is a personal matter unrelated to their business interests.
Sark, one of the Channel Islands where cars are prohibited, has been linked to the family since twin brothers Sir David and Sir Frederick acquired the nearby island of Brecqhou in 1993.
It is understood Alistair, co-founder of the online estate agent Yopa and a motor racing driver, inherited the parcel of properties when Sir David died in 2021.
Any sale of Sark properties would not include the family’s private castle on the neighbouring island of Brecqhou.
Sir David’s and Sir Frederick’s sides of the family fell out over debts and control of their businesses, which include The Telegraph and the online retailer Very.
The Barclay family regained ownership of The Telegraph in December after repaying £1.2bn in overdue debts to Lloyds Banking Group. They are barred by law from exercising any control, however.
The Barclay family’s activities on Sark have sparked controversy, as Sir David and Sir Frederick were embroiled in conflict with the island’s leaders. The brothers objected to Sark’s ancient constitution and particularly the powers it grants to the unelected Seigneur.
The mortgage crisis, which upended plans to move house using cheap credit, has also been a factor in the million-pound property slump in the last year.
Across Britain, property transactions were down 20pc in 2023 compared with the year before, according to HMRC.
Lucian Cook, head of residential research at Savills, said: “The race for space and dash to the countryside from mid-2020 drove a sharp increase in the number of £1m homes outside of London and other urban settings.
“However, increased mortgage costs and a rebalancing of demand back to city living have meant about 30pc of those whose homes crossed the £1m threshold, have, for the time being at least, become aspiring million-pound homeowners once again.”
The reversal coincides with workers returning to the office. For the first time since the pandemic, more people are working in the office full time (43pc) than hybrid (39pc), with only 18pc fully remote, according to data from recruitment consultancy Hays.
Emma Fildes, a property adviser at buying agents Brick Weaver, said: “Buyers and sellers have realised the grass isn’t always greener out of town. Many believed that life would never be the same again post-pandemic. Offices would become surplus to requirement and we’d all be scheduling our Zooms to suit.
“Though office-based work has reduced, employers are clawing back days in the office. Faced with long journey times and Network Rail delays, this has led to many questioning their move.”
This is because each bank bases its forecasts on its own loan book. The Office for National Statistics provides the most accurate snapshot of the housing market, but it is published two months after the data is recorded.
Nicky Stevenson, of the estate agents Fine & Country, said: “Although there is a huge disagreement between Halifax’s 1.7pc price rise for the year and Nationwide’s 1.8pc fall, the property market has performed far more strongly than many analysts predicted.
“There are many reasons for optimism as we head into the new year. Economic stability is encouraging lenders to offer increasingly competitive mortgage rates, widening affordability for buyers and driving activity.”
This week HSBC became the first major high street lender to offer a mortgage deal with a rate below 4pc for homeowners looking to remortgage. The lender also reduced its two-year fixed deals to 4.49pc, below the 4.5pc threshold for the first time since June, according to the broker L&C Mortgages.
Halifax has also announced cuts on some of its mortgage deals by as much as 0.92 percentage points. Meanwhile, Leeds Building Society has also recently cut rates by 0.49 percentage points and now offers a two-year fix at 4.6pc.
UK Finance, the banking trade body, found that gross mortgage lending dropped by more than a quarter last year and forecast falls of a further 5pc in 2024.
However the property listings site Rightmove said that more than 10,000 new properties came to market on Boxing Day alone, 26pc higher than last year in what it described as an “early positive sign” of a bounceback.
Meanwhile, net mortgage approvals for house purchases rose from 47,900 in October to 50,100 in November, according to the latest figures from the Bank of England.
Here’s a home truth for Gen Z – it’s never been easy to buy a house
Imagine what would happen if interest rates reached that level now. In those days, though, we were used to it – just as it was normal to wait several weeks for the Post Office, later British Telecom, to provide a phone line. (As a journalist, I was, in this respect, lucky – I could claim that a phone was essential for my work).
When I got married in 1980, we soldiered on in the same small Battersea flat, in the lower half of an artisan’s cottage, whose garden, or rather yard, was principally occupied by a concrete air raid shelter. A cat had a litter of kittens in it, which my wife adopted, making the flat even more crowded.
Fortunately, having two incomes, we were able to cross the river to Pimlico – lighter and airier, with broader streets and more trees. Our original flat had, with inflation, gone up in value, but that was only because the whole market had moved: it did not make the new purchase more affordable.
We loved it, though – two floors at the top of a tall house, with sunlight streaming through the windows. Admittedly there was a bomb site opposite and a long stretch of derelict terrace, but the area was still struggling to rise above the reputation it acquired after the Second World War. The estate agent Roy Brooks summed it up in the headline of one of his notoriously unvarnished advertisements, later gathered into a book: Brothel in Pimlico.
By 1990, with hopes of starting a family, we were anxious to move. Once the punitive mortgage rates needed to bring down inflation had fallen, the Thatcher decade was good to home buyers. Nigel Lawson’s Big Bang, which liberated the financial markets in 1986, unfettered the imagination of mortgage lenders.
I got in with a financial adviser who could pull many a rabbit out of the hat (until, many years later, he went bust and we got stuck with a valueless investment in Dubai; to our relief, the FSA bailed us out.)
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