Alternatives to UK buy-to-let: Grainger and Daejan

The Conservative government has introduced tax changes that have made UK buy-to-let investment less attractive. Further moves are likely given the pressure from voters that are trying to get onto the housing ladder. It is therefore worth considering listed alternatives to buy-to-let such as Granger and Daejan.

UK residential property has been a fantastic investment over the last couple of decades. This is particularly the case in high demand and supply-constrained cities that have attracted international buyers.

A flat in a city like London is part of a monopoly because there is a limited amount of land in the city centre.  The UK is itself land constrained and as such residential property has been resilient and generated strong long-term returns.

This backdrop has encouraged investors to turn towards buy-to-let property and away from equities.  The shift is understandable given that the FTSE 100 is currently trading below the level it reached back in 2000.  

An attraction of buy-to-let is that it solves the “principal agent” problem because investors can control the asset themselves.  Buy-to-let is also one of the only areas that an individual can obtain significant debt finance.

However, buy-to-let investment can mean a lack of diversification and high transaction costs. ...