Niche property investment sectors becoming increasingly mainstream

It is a good time to consider niche property investment opportunities, says Guy Gowing from Arnolds

It is a good time to consider niche property investment opportunities, says Guy Gowing from Arnolds Keys Picture: Getty/iStockphoto - Credit: Getty Images/iStockphoto

Guy Gowing, managing partner at Arnolds Keys, discusses how Covid-19 is causing upheavals in property investment.

Guy Gowing is managing partner at Arnolds Keys estate agents Picture: Arnolds Keys

Guy Gowing is managing partner at Arnolds Keys estate agents Picture: Arnolds Keys - Credit: Archant

With interest rates at a historic low, investing in property remains an attractive option for those looking to achieve an annual return with the benefit of capital growth. But with the future role of the office far from certain, and Covid-19 and online shopping conspiring to throw a shadow over high street retail, it’s a good time to think about what other kinds of property investment are available – options which tap into the relevant components of the post-Covid world.

It’s axiomatic that in times of crisis money retreats into the traditional safe havens, typically gold and farmland. The big advantage of agricultural land is that they are not making it anymore, and that finite supply is a good indicator of long-term value. Couple that with a renewed focus on the UK’s food security (because of the double whammy of Covid-19 and Brexit), and farmland and agricultural property should certainly be on the investor’s horizon at the moment.

Buy-to-let residential property is still rightly a popular investment choice, but its attractiveness has been dented by increasing taxation over the past few years. This is why holiday lets have come up the agenda.

The growth of the staycation has been widely reported, and this year’s overseas travel restrictions have accelerated that trend. Holidaymakers who have experienced UK breaks find they like them (and have come to realise the hassle involved in travelling abroad), and so the demand for professionally managed and well-run domestic holiday properties is growing exponentially.

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While Covid has magnified this trend, it is likely to continue into the future. Flying is becoming increasingly unfashionable, and the truth is that it is likely to become more costly and more exclusive in the future, too.

Another sector of commercial property which is being increasingly considered by investors is medical property. GPs surgeries, dental practices, complementary practitioners such as chiropractors and osteopaths, and even vets are all businesses which need premises.

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What’s more, they are businesses which are largely immune from economic downturns and, for NHS practices at least, likely to remain well-funded into the future.

We are finding increasing demand for such properties: just recently we sold a medical centre in Ipswich occupied by a GP practice on a long lease, and this is just one example of a growing trend in medical-related property investment.

The lesson in all of this – and the lesson to be learned from the seismic events of 2020 – is that the world is changing fast and an old-fashioned view of property investment in traditional sectors is becoming outdated. These sectors will remain important, but increasingly what were once niche areas will force their way into the mainstream.

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