The average UK house price has risen from £1,884 in 1953 to a staggering £265,240 in the 4th quarter of 2024. Using data from Nationwide Building Society.

Plus you had somewhere to live, without paying rent.

Looking for ISA dividend shares? 2 passive income heroes to consider today

If broker forecasts are correct, these top UK dividend shares could provide ISA investors with a large and growing passive income.

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Royston Wild

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.

Buying dividend shares can be a great way to grow one’s Individual Savings Account (ISA).

The cash rewards from high-yield dividend stocks can be used to buy lots more shares. This in turn can lead to exponential potential growth over time thanks to the mathematical miracle of compounding.

With this in mind, here are two top dividend shares I think are worth serious consideration.

The PRS REIT

Dividends from share investing can fluctuate wildly according to broader economic conditions. So given the uncertain outlook for 2025, now could be the time to consider buying dividend payers in defensive sectors.

The PRS REIT (LSE:PRSR) is one stock that could prove a wise buy. As a major build-to-rent specialist — it has more than 5,400 residential homes on its books — rent collection remains stable at all points of the economic cycle.

Furthermore, Britain’s ongoing housing shortage means it doesn’t have to seriously worry about falling occupancy that would impact profits.

There’s another good reason I think the firm’s an attractive dividend share to consider. Under real estate investment trust (REIT) regulations, it must pay a minimum of 90% of annual profits from its rental activities out in the form of dividends. This is in exchange for certain tax breaks.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

For this financial year (to June 2025), PRS REIT offers a 4% dividend yield. This is ahead of the 3.6% and 3.4% averages for the FTSE 100 and FTSE 250 indexes respectively.

And for financial 2026, predictions of dividend growth drive the yield to 4.2%.

Not even residential property stocks are completely risk free. A particular problem for PRS REIT could be if interest rates remain at or around current levels, dampening asset values and impacting borrowing costs.

But on balance, I think the FTSE 250 company is worth a close look.

Pan African Resources

A bright outlook for gold prices means Pan African Resources (LSE:PAF) also demands serious attention, in my opinion.

In sterling terms, gold struck fresh record highs last week. On a US dollar basis it also reached new multi-week peaks. I believe prices are likely to continue climbing as macroeconomic and geopolitical worries — exacerbated by US President Trump’s words on trade tariffs and foreign policy — drive demand for safe-haven assets.

Investors have a multitude of UK precious metal stocks to choose from to capitalise on this. Those seeking dividends may wish to consider Pan African Resources, a mid-tier gold supplier in South Africa.

Predicted dividend growth over the short term means the miner’s dividends are a chunky 4.4% and 7.7% for the next two financial years (to June 2025 and 2026).

Of course there’s no guarantee that gold prices will continue rising. They could fall for a variety of reasons, for instance if the US dollar strengthens or the economic landscape improves.

Yet even if these affect Pan African’s earnings, the business still looks in good shape to pay those large predicted dividends. Payouts are covered between 3.1 times and 3.9 times by anticipated profits, comfortably above the safety benchmark of two times and above.

££££££££££££££

But as always, as it’S your hard earned best to DYOR.

The Results Round-Up: The week’s investment trust results

First results of the New Year are in! BlackRock Income & Growth (BRIG), the quickest of the blocks with an +18.1% NAV return for the year. Chrysalis (CHRY), next with a +4.9% full-year NAV per share increase. Miton UK Microcap’s (MINI) third in, although its latest Half-year Report could well be its last – the Board has decided that the fund is now too small to be viable.

By Frank Buhagiar

BlackRock Income & Growth (BRIG) excited for the year ahead

 BRIG, the first of London’s investment companies to issue results in 2025. And a decent set of full-year numbers it was too: net asset value (NAV) per share came in at +18.1%, comfortably ahead of the FTSE All-Share Index’s +16.3%. The investment managers put the outperformance down to good stock picking, particularly in the financials sector – standout performers included 3i Group, Standard Chartered, NatWest and Intermediate Capital Group.

Despite the strong year, the investment managers see scope for further progress. That’s because “The UK stock market continues to remain depressed in valuation terms relative to other developed markets offering double-digit discounts across a range of valuation metrics.” If that’s not enough, the managers also highlight the market’s 3.7% dividend yield. So, “Whilst we anticipate economic and market volatility will persist throughout the year, we are excited by the opportunities this will likely create; by seeking to identify the companies that strengthen their long-term prospects as well as attractive turnaround situations.” The strong full-year performance wasn’t enough to prevent a 3.8% share price decline on the day of the results though. Mr Market, a demanding master at times.

Winterflood: “Share price TR +13.2%, as discount widened from 8.7% to 12.9%. Managers expect economic and market volatility to persist throughout the year, with potential for attractive ‘turnaround’ opportunities.”

Chrysalis Investments’ (CHRY) year of significant change

CHRY reported a +4.9% increase in NAV per share for the year thanks to higher valuations for some of the portfolio’s biggest holdings, notably Starling and Klarna. Overall performance would have been even stronger but for a write down in the holding of wefox. Much better showing from the shares which were up +50% during the year resulting in the share price discount to net assets shrinking from 54% to 34%.

Not bad given there’s been a lot going on at the growth capital investor. As Chair Andrew Haining notes “The year to 2024 has seen significant change for your Company, both in the way that it is run, and also in market sentiment surrounding its portfolio holdings.” The former refers to a change in investment adviser “I am delighted to say that this process has been seamless” and presumably the launch of the Capital Allocation Policy that is focused on “balancing shareholder returns with long-term growth”. The latter, meanwhile, a nod to “the return of some positivity in the stock market for ‘growth assets’ and thus an improving outlook for similar investments in private markets” as evidenced by recent realisations from the portfolio. The Chair is hoping the improved sentiment will result in “a successful IPO of Klarna this year.” Shares unchanged at the time of writing. Investors adopting the wait-and-see approach.

Liberum: “CHRY comes off a very strong Q4 2024, driven by better sentiment towards growth capital, the Graphcore and Featurespace realisations, a high-impact buyback programme to date, and Klarna moving closer to IPO. Ongoing implementation of the capital return programme and Klarna’s expected IPO in 2025 is the next key catalyst. We are BUYers with a 122p TP, reflecting a 20% discount to our 12M NAV forecast.”

Numis: “CHRY has committed to return an initial £100m to shareholders, with 25% of net profits on realisations returned thereafter. The results include commentary on the direction of the company, with the board highlighting the potential risks of a ‘de-facto wind down’. Therefore, it is considering how to balance future returns of capital beyond the existing capital allocation programme against risk factors such as increased portfolio concentration and reduced scale, which it believes may result in the discount widening again.”

Miton UK Microcap’s (MINI) valedictory results?

MINI’s latest Half-year Report could well be its last. That’s because redemption requests of 40.4% of the company’s issued share capital were received during the most recent annual redemption opportunity. This meant MINI’s market cap has fallen to a very mini-looking £20m. No surprise then that the Board has decided MINI is too small to remain viable and is looking at winding up the fund. As Chairman Ashe Windham writes, “This is my valedictory Chairman’s statement. The Company is now at a size which some investors consider to be too small from a liquidity perspective, particularly given the increasing demand from investors for larger listed funds.” The persistent and material share price discount to net assets was also cited. For the record, adjusted NAV per share fell 7.6% (including dividends re-invested) over the half year. So no going out with a bang then. Shares opened lower on the day too. The market perhaps awaiting more details on the proposed wind-up.

Winterflood: “The fund has received a proposal from Premier Miton regarding a rollover option into one of Premier Miton’s open-ended funds, which the Board is evaluating. It is expected that a cash exit alternative will also be offered. The winding up of the fund will be subject to shareholder approval and further announcements will be made in the coming weeks.”

The Tip Sheet

More top picks for 2025. MoneyWeek thinks things could be looking up for renewables and that now could be an opportune time to buy Greencoat UK Wind (UKW). Investors Chronicle meanwhile names four funds that could benefit from a recovery in the sector: UKW (again), Urban Logistics, Sirius Real Estate, Brown Advisory US Smallers. But in case a recovery proves elusive, the IC also tips Ruffer.

By Frank Buhagiar 07 Jan

MoneyWeek – Five stocks for 2025

Last week, The Times put forward five stocks to watch out for in 2025. One week on and it’s the turn of MoneyWeek. The article kicks off with an admission “Deciding where to invest for 2025 is a complex task; while opportunity abounds, there are various questions that investors will need to ask themselves.” Questions such as will the rally in big tech continue? Can the FTSE 100 build on 2024’s strong performance? How will the Autumn Budget impact the UK economy, and which stocks will benefit (or suffer) as a result? So, with these questions and more in mind, MoneyWeek has come up with a list of companies it believes are best placed to navigate what 2025 has in store. Among the MoneyWeek five, one of London’s investment companies – Greencoat UK Wind (UKW).

Fair to say, the renewables infrastructure fund, like the rest of the sector, had a tough 2024 with the share price ending the year off -15.7% “as the economic climate steered investors away from these kinds of longer-term, capital-intensive sectors.” But, as MoneyWeek points out, things could be looking up for the sector. “Infrastructure investments and green energy are likely to be key priorities for the Labour government, with significant investment promised in October’s Budget.” What’s more, that fall in its share price means that Greencoat is now trading at a 20.4% discount to NAV (net asset value), despite a dividend yield of 7.7%. Now could be an opportune moment to buy into this sector at a discounted rate.

Investors Chronicle – Investment Ideas of the Year 2025

Rather than come up with just five stocks for the year, The Investors Chronicle has gone one step further and put together five themed portfolios for the year made up of five listed companies each. One of these themes, rebounding trusts. For after a challenging few years for London’s investment companies which have seen share prices across the sector fall to chunky discounts to respective NAVs in response to the high interest rate environment, the tipster believes the tide is slowly turning. No surprise then that the majority of the five funds in the portfolio have seen their share prices among the hardest hit. “This year’s portfolio covers a broad range of sectors but trusts broadly fall into one bucket: recovery.”

Among the five, two property funds – Urban Logistics (SHED), a fund with a portfolio of warehouses in urban areas; and Sirius Real Estate (SRE), which invests in German business parks. Like property, renewable energy infrastructure, another sector that has found the going tough. And like MoneyWeek above, the IC plums for Greencoat UK Wind (UKW) to gain exposure to any potential recovery in a sector which “should be supported by Labour’s energy plans. Renewable assets are riskier than core infrastructure as there is an additional exposure to power prices to account for, but we remain confident.”

Next up, The Chronicle highlights Brown Advisory US Smaller Companies (BASC) as a way of tapping into a recovery in US small caps – after an extended period of underperformance, US small caps stand to benefit from falling interest rates and reshoring. Finally, should a recovery prove to be elusive and should interest rates remain stubbornly high, the IC’s final pick is Ruffer (RICA), the “multi-asset fund that holds some defensive stocks but also makes substantial use of bonds, gold and other alternative assets in the hope of defending shareholders from stock market crashes.” What you could call, a ‘just-in-case’ pick.

Watch List

Discount Watch

Alternative funds still dominating the list of investment companies trading at 52-week high discounts to net assets – seven of the 10 names on the latest Discount Watch are alternatives. But focus this week is on one of the few non-alternative trusts on the list – European Opportunities (EOT). What could be behind the European fund’s appearance on the Discount Watch?

By Frank Buhagiar

We estimate there to be 10 investment companies which saw their share prices trade at 52-week high discounts to net assets over the course of the week ended Friday 03 January 2025 – one more than the previous week’s nine. Please note, seeing as 2025 is just days old, the graph below shows the number of year-high discounters on a rolling rather than the usual year-to-date basis.

New year, same story and, to a large extent, same names on the list. Eight of last week’s nine make it onto the Discount Watch this time round and of the eight, seven belong to the alternatives camp: one from debt, two from property and four from renewables. Alternatives seemingly continue to be weighed down by concerns that higher bond yields may lead to higher discount rates which in turn could result in asset valuations taking a hit.

The above alternatives narrative, a frequent feature in the Discount Watch lately. So, in the interests of mixing it up, focus this week switches to one of the two new, non-alternative, additions to the list: European Opportunities (EOT). A look at the graph shows the share price took a turn for the worse week commencing Monday 18 December 2024, the same week (and day) activist investor Saba Capital called for the Boards of seven investment trusts to convene general meetings so that shareholders can vote on their plans to replace existing directors with their own nominees as part of their delivering value campaign. Now EOT, not among the Saba Seven. But the pair have locked horns before and, as at end of July 2024, Saba held a 4.7% stake in EOT. Question is this, is the weak share price performance down to concerns EOT could once again find itself in Saba’s sights? Or could it be down to disappointment that the fund wasn’t inSaba’s sights this time round?

The top five

Fund	Discount	Sector
HydrogenOne Capital Growth HGEN	-79.96%	Renewables
Ceiba Investments CBA	-74.95%	Property
VPC Specialty Lending Investments VSL	-55.27%	Debt
US Solar Fund USF	-53.58%	Renewables
Ecofin US Renewables RNEW	-52.83%	Renewables

The full list

Fund	Discount	Sector
VPC Specialty Lending Investments VSL	-55.27%	Debt
European Opportunities EOT	-13.96%	Europe
Scottish American SAIN	-12.37%	Global Equity Income
North Atlantic Smaller Cos NAS	-34.90%	Global Smaller Companies
Urban Logistics SHED	-35.25%	Property
Ceiba Investments CBA	-74.95%	Property
Gore Street Energy Storage GSF	-52.05%	Renewables
Ecofin US Renewables RNEW	-52.83%	Renewables
HydrogenOne Capital Growth HGEN	-79.96%	Renewables
US Solar Fund USF	-53.58%	Renewables