Category Archives: Property Investor Economics

Commentary on the August 2017 Property Investor´s Factfile

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August 2017 Property Investor´s Factfile The Property Investor Blog´s monthly factfile presents a range of relevant data from national / London house prices, the latest buy-to-let Limited Company (SPV) loan rates, LIBOR / SWAP rates and rentals to mortgage debt figures and information on the first-time buyer sector.  Some noteworthy observations from the last month are outlined below: Both the Halifax and LSL / Acadata house price indices reported drops between May and June of 1.05% and 0.69% respectively. During the same period, however, Nationwide reported 1.24% growth in prices. Land Registry slightly lagged, although arguably more accurate, data pointed to average prices across England and Wales growing by just 0.28% (from £220,094 in April to £220,713 in May); Rightmove asking prices slightly recovered from a 0.37% drop in June, yet only marginally rose to 0.1% in July.  According to Rightmove director Miles Shipside: “prices are in the summer... [Read More]

The Future of Student Housing

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Held in late June 2017, this half-day conference explored some of the issues of the day facing the student housing sector – with a range keynotes and panel discussions involving investors, agents, sector professionals, amongst other stakeholders and representatives.  Topics approached included the current state of play and challenges; ongoing investment interest; an innovative student mortgage finance model; perspectives from a student landlord; how to balance quality with affordability; student housing development financing and some direct insights into how the sector is attending to real student needs. We have outlined some of the key takeaways from these presentations over this long-form post.  Please click on the links in the contents box below to head to specific topics of interest and use the arrows to scroll back up. The State of Play and Challenges for the Student Housing Sector  Karen Burke,... [Read More]

Rightmove´s Head of Lettings on the Current State of Play

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Below are some of the highlights of a recent conversation we had with Sam Mitchell, Head of Lettings at Rightmove – largely based on the portal´s Q2 2017 Rental Tracker: The quarterly data is extracted from Rightmove´s portal, based on properties marketed by both online and offline letting agents. Achieved rents may be lower and even higher, relative to the level of demand; The Q2 figures revealed that, while the national average asking rent (excluding Greater London) rose by 1.9%, Greater London´s rental values actually dropped by 3.2% (with a quarterly drop of 0.2%); However, the general feeling moving forward is that the supply of rental property is likely to be constricted as a result of the 3% Stamp Duty Land Tax (SDLT) surcharge implemented in April 2016, Section 24 of the Finance (No. 2) Act 2015 and Prudential Regulation Authority (PRA) stricter borrowing... [Read More]

Commentary on the July 2017 Property Investor´s Factfile

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July 2017 Property Investor´s Factfile The Property Investor Blog´s monthly factfile presents a range of relevant data from national / London house prices, the latest buy to let Limited Company (SPV) loan rates, LIBOR / SWAP rates and rentals to mortgage debt figures and information on the first-time buyer sector.  Some noteworthy observations from the last month are outlined below: According to Rightmove asking prices for UK homes fell by 0.37% in June, the first price drop in the month since 2009. Director Miles Shipside attributed this to buyers´ confidence being “affected by inflation outstripping their pay packets” in addition to “current political events”. The figures were indeed based on properties advertised between May 14 and June 10 (therefore largely covering the weeks preceding the general election); Data from the Halifax reported a 0.48% rise in prices between and April and May; Whilst the latest Nationwide... [Read More]

Private Rented Sector Growth & The Expansion of Build to Rent (Bisnow)

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Below is a summarised write-up of three broadly overlapping build to rent (BTR) panel discussions from a mid-May 2017 Bisnow event.  Drawing on both domestic and global expertise, the discussions covered a number of relevant topics from managing the sector´s growing pains, the future sustainability of the “wall” institutional funding driving progress in addition to some interesting operation-led feedback and discussions on the issue of affordability. What Can the British Private Rented Sector Learn from the US? Moderated by Mike Kavanau, senior managing director at Chicago commercial real estate brokers HFF, the comparatively smaller panel of the day started with Michael Ablon, Principal and founding partner at Texas-based PegasusAblon sharing his experiences of the developing build to rent (BTR) projects in the Dallas / Fort Worth areas.  Like much of urban US, this region has seen noticeable signs of densification and... [Read More]

Commentary on the June 2017 Property Investor´s Factfile

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June 2017 Property Investor´s Factfile The Property Investor Blog´s monthly factfile presents relevant data from national / London house prices, the latest buy to let Limited Company (SPV) loan rates, LIBOR / SWAP rates and rentals to  mortgage debt figures and information on the first-time buyer sector.  Some noteworthy observations from the last month are outlined below: Nationwide reported average prices in the UK reaching £208,711, slowing down annual growth to 2.1 per cent – the lowest in four years.  Despite the national unemployment rate hitting a 42-year low in the quarter preceding March, Robert Gardner the building society´s chief economist pointed out that real incomes were under pressure due to inflation overtaking wage growth. Speaking to the Guardian, Gardner commented that there is further evidence “that the housing market is losing momentum” which “may be indicative of a wider slowdown in the household sector, though data continues to send mixed... [Read More]

The 2017 London Residential Summit (Estates Gazette)

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Estates Gazette´s early May event sought to address a number present-day questions relating to the current state of London´s residential property sector. Introduction Against a backdrop of Sterling´s post-Brexit devaluation, a marked decline in high-end property prices and the threat of skills shortages, many of the discussions were nonetheless refreshingly directed towards sustainable, non-speculative industry growth. With the government´s housing white paper now in play, the issue of whether “action will follow talk” was deliberated alongside frequent mention of the build to rent sector´s role in tackling the Capital´s housing shortage.  Other conversations included panel discussions amongst Outer London Borough council on the future of housing delivery, advancing social housing delivery in the capital´s estate communities and a very interesting debate amongst leading Housing Associations. London´s Housing Plan Reflecting on the first anniversary of Sadiq Khan’s mayoralty, Deputy Mayor for... [Read More]

Acuitus Auctions on Transitioning from Residential to Commercial Property (Part 2)

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Following on from part 1 of our interview with Richard Auterac, chairman at commercial auction house Acuitus, we continued to explore the question of due diligence and how building relationships with commercial agents and attending auctions is fundamental to gain a greater understanding of the sector. No contemporary interview would be complete without asking about the EU referendum and Richard also gave us his thoughts on how business rate reforms may impact buying decisions in the coming years. Finally we approached the office building segment, the rapid growth of schemes with B1 to C3 Permitted Development Rights and gained some practical insights on buying commercial property at auction. — PIB: Ruban Selvanayagam from the Property Investor´s Blog RA: Richard Auterac from Acuitus Commercial Property Auctions — PIB:  Do you have specific advice on how an investor can engage in more granular research? RA: My view is that if you are a first-time commercial buyer, it... [Read More]

RICS Economic & Residential Property Outlook (End of April 2017)

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Below is a summary of a spring 2017 talk given by Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors (RICS) – largely based on his insights using the high profile market surveys regularly conducted by the organisation as well as other reputable data sources. Rubinsohn is closely involved with policy development and regularly works with the Bank of England, International Monetary Fund (IMF) and the World Economic Forum on issues related to property sector as well as being on the board of housing provider L&Q. Simon split his talk into two parts: the macro-economic picture and a more specific exploration of the housing sector. The Macro-Economic Picture Commenting that many economists have had to admit a gross overestimation of the impact of Brexit, Rubinsohn started by referring to the Citi UK Economic Surprise Index demonstrating that the preponderance of data flow has shown that the economy... [Read More]

How Landlords Can Be More Tax Efficient Post Section 24 (Part 1)

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Although there is arguably a broader awareness of the tapered erosion of mortgage interest relief resulting from Section 24 of the Finance Act 2015, many landlords have decided to adopt a “wait and see” approach with regards to their future liabilities.  Indeed, for basic rate taxpayers there may not be too much cause for concern – even after the full implementation of the legislation in 2020.  For everyone else however, early preparation for what will be a notable hike in tax liabilities is strongly advisable. With a thwarted Judicial Review attempt and a Chancellor seemingly paying little attention to the issue, hedging on some form of policy reversal or retrospective allowance is risky and could create insurmountable challenges down the line. We explored the issue with Simon Misiewicz of Optimise – a Nottingham-based accountancy practice that works predominantly with property investors and traders.... [Read More]