How to invest in property – without becoming a landlord

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.”