Property investors using bridging loans have made the greatest annual returns compared to other alternative asset classes, research from West One Loans has concluded.
Using property bridging loans investors have seen a 10.5% return in the 12 months to July. Indeed, those who invested £500,000 in bridging loans on 1 July 2013 would have seen their investment climb to £552,000.
Property Bridging also proved to be a stable asset, as it showed a three month standard deviation of just 0.03%.
Duncan Kreeger, director at West One Loans, said: “Economic recovery is strengthening across the developed world, led by the UK. So alternative investments are no longer a question of finding havens.
“Property now has an enormous capacity for growth, to overcome a particularly sharp downturn and make up for the ground lost over the last five years.
“But while developers are in no way short of projects, finance is the tightening bottleneck to further progress. For those private investors who can offer assistance, this is presenting enormous opportunities.
“Bridging loans can give individuals and smaller institutions access to the property lending market – previously dominated by increasingly cautious large banks.”
The returns on property with bridging loans are double the 5.3% from collectable art, while gold investments are worth 1.6% less than a year ago.
Investors in fine wine have suffered an even greater loss of 16.5% over the year to 1 July, as a £500,000 investment would have lost more than £80,000 in a year to be worth £417,500 as of July.
Kreeger added: “Sophisticated investors are looking to alternative assets as a new way to navigate risk and return, spreading their capital between a greater variety of asset classes.
“But alternatives are also about new ways of linking the investor to the asset. For example, physical gold or art works are an excellent way to hedge against more mainstream markets – but the ownership and investment structures are not particularly revolutionary.
“By contrast, short-term property loans from individuals to developers have a similar level of liquidity as many physical assets, but allow more imaginative links with profitable projects.”