Your client’s own home would not normally be considered to be part of their investable assets, and will usually have been purchased for reasons of lifestyle – not as an investment. The fund provides the opportunity to gain exposure to a broad range of professionally managed private rented sector properties, adding another asset class to their investment, ISA or pension portfolios.
Total returns from private rented residential property have historically demonstrated low volatility and little correlation with other mainstream asset classes such as equities, fixed income and commercial property and can, therefore, add further diversification to a portfolio.
Due to its scale, the fund is also able to spread the risk of property investment rather than being concentrated in one or two properties in a single area in the same way a typical buy-to-let investor may be.
TM home investor fund invests in flats and houses of various sizes across England, Scotland and Wales to broadly reflect the UK (excluding Northern Ireland) housing market in terms of regional distribution and property type. Hearthstone favours new or modern properties to keep maintenance and management costs as low as possible, and chooses homes that will attract long-term tenants in strong performing rental locations with an active re-sale market to maximise investor returns.
The fund can also be used to meet specific objectives, such as inheritance tax planning where a client wants to gift amounts to a child or grandchild with the aim of helping them on to the property ladder.