Alternative Investment  

Five alternative income investment options

Another choice is the John Laing Infrastructure Fund, which yields just more than 5 per cent. The £1.3bn trust’s holdings include Barcelona Metro Stations, a Ministry of Defence building and a number of hospitals.

The main detractor from these investments is that rising inflation could eat into returns. Those long-term leases are often not inflation-linked, so today’s yields may not look so impressive if inflation claws its way back up beyond 2.5 per cent and sterling continues to fall.

Student accommodation

Another variation on the ability of property to provide a steady income is in the provision of accommodation for students. Mr Sweeney says that much of the demand is being driven by wealthy individuals from overseas who want a good education and decent housing to boot. 

Empiric Student Property, which yields 5.4 per cent, owns buildings across many of the most popular university towns, including Edinburgh, Durham and Cardiff. 

GCP Infrastructure is a more London-focused trust with studio rooms in fashionable spots such as Greenwich and Shoreditch. The trust, which yields 5.8 per cent, also owns 153 rooms in Bristol.

Aircraft leasing

The premise behind aircraft leasing companies is that an airline would rather lease 10 planes than buy just one. Commercially, having a larger fleet certainly appears to make more sense, and the airline gets to give the plane back after an agreed period, ensuring it can always have the latest model.

Trusts in this space raise money from investors and in bank loans to buy a plane, which they then lease to an airline, culminating in overall yields of 6 per cent or more.

The question for intermediaries is whether they understand these products well enough to back them. There are, at least, several investment vehicles to compare and contrast: names such as Amadeo Air Four Plus, DP Aircraft, and three versions of the Doric Nimrod Air offering.

Peer-to-peer investment trusts

Peer-to-peer (P2P) investing has captured the attention of retail investors over the past few years for its ability to pay higher rates of interest than high street savings accounts. Intermediaries have become more interested, too, but reasons to temper that enthusiasm have been emerging more recently.

P2P involves an individual lending money to a stranger who needs a loan via a middleman website – the saver gets a better rate of interest than they can get from their bank, and the borrower gets a loan at a lower cost, too. Savers’ money is often split across a number of different loans to spread the risk.