One Third of Millennials Will Continue to Rent in Their Retirement

The number of families with children living in rented property tripled between 2003-2016…

The Resolution Foundation has proposed a series of reforms aimed at protecting tenants and landlords in the private rented sector.

According to the think-tank’s research, half of all millennials – people born between 1980 and 1996 – will be living in rented property up to their 40s, whilst a third are likely to be renting beyond retirement.

Furthermore, four out of ten millennials aged 30 are already renting, double the rate of the previous generation and four times that of baby boomers, whilst the number of families with children lived in the private rented sector has grown substantially, from 0.6m in 2003 to 1.8m in 2016.

Although they acknowledge the policies the government has introduced to make housing more accessible for first time buyers, the Resolution Foundation argues that more needs to be done to provide greater security for those that rely on renting.

This includes short-term measures such as proposals for indeterminate tenancies, which are essentially open-ended leases. Such tenancies are already in use in parts of Europe, including Scotland.

A new tribunal system could also be created, in order to resolve disputes in a timely and cost-effective manner.

Lindsay Judge, a senior analyst at the Resolution Foundation, notes that support needs to be available across all areas of the housing market: “While there have been some steps recently to support housebuilding and first-time buyers, up to a third of millennial still face the prospect of renting from cradle to grave.

“If we want to tackle Britain’s ‘here and now’ housing crisis we have to improve conditions for the millions of families living in private rented accommodation.”

Number of Build-to-Rent Homes Under Construction Up 47%

The number of build-to-rent properties either completed, under construction or planned has risen significantly across the UK in the past year.

Analysis by Savills, commissioned by the British Property Federation (BPF), reveals there were 117,893 build-to-rent homes recorded across all the stages of development in Q1 2018; a 30% increase on Q1 2017.

Completions, as well as build-to-rent homes under construction, have grown substantially by 45% and 47% respectively, whilst properties in the planning stage have increased by 19%.

Of all the new build-to-rent homes either completed, under construction or planned, 60,530 (51%) are in London, followed by 29,600 in the North West (25%), and 13,009 across the Midlands and Yorkshire & the Humber (11%).

Ian Fletcher, the director of real estate policy at BPF, commented: “The build-to-rent sector is evolving quickly, with significant delivery in the regions and more houses, rather than just apartments, coming forward.

“Policy is also adapting, as to date the sector has grown without a planning blueprint. This is now changing. With the draft revised National Planning Policy Framework, local authorities will now have to specifically identify how many new rental homes their respective areas need.”

Meanwhile, Housing Minister Dominc Raab said: “The 45% increase in completed build-to-rent homes is good news, but we’re restless to do more.

“Our revised National Planning Policy Framework is a crucial next step in supporting the build-to-rent sector, reforming planning rules, and helping to deliver 300,000 homes a year by the mid-2020s.”

Recent analysis from Landbay revealed that rental payments across the UK amount on average to 52% of a household’s disposable income.

Manchester, Birmingham & Leicester Topping House Price Growth

Growth in property values in London is lagging behind that of regional cities

Analysing housing trends across 20 UK cities, the newest research by Hometrack shows an average of 6.1% increase in house price inflation in October– the greatest growth seen since September 2016.

According to the market experts, the value of homes in regional cities is rising faster than London, as affordability levels in these areas remain attractive and unemployment continues to fall.

Topping price inflation over the month was Manchester, in the North West, with prices in the area increasing by 7.9% year-on-year to an average of

In the ranking table, Manchester was closely followed by Birmingham and Leicester, both in the Midlands, recording a property price inflation of 6.2% and 6.1% respectively compared to a year earlier.

Conversely, decreases in house price growth were seen only in Oxford and Aberdeen, with values dropping by 0.6% and 3.1% respectively in these cities.

Whilst not at the bottom, London registered an annual house price increase of just 3.0% with the average home in the capital now priced at nearly half a million, or

Earlier this week, the latest analysis by Your Move showed robust rental growth in the East of England in the year to October, and yields remaining the strongest in the North.

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Housing Supply Could be Boosted by More Funding to SME Builders

In his budget speech this week, the Chancellor pledged 2 billion for the Home Building Fund to be targeted specifically at small and medium sized builders (SME) – allowing them to play a greater role in tackling the UK’s critical housing shortage.

Welcoming the announcement, Chief executive Brian Berry from the Federation of Master Builders (FMB) said that the government’s new goal of building 300,000 homes pa by mid-2020s, together with the 50 billion pledged in the budget to meet this target, will boost the sector.

Furthermore, a 700 million fund has also been promised to increase opportunities for small scale developments, by requiring councils to deliver more homes from smaller sites, which are faster to build.

Further commenting on the proposals, Mr Berry said that with Brexit on the horizon, one of the major challenges to building more will be a shortage of skills, as European workers make up a significant proportion of the sector’s workforce.

Ensuring that the UK’s building industry continues to have access to a skilled labour pool remains therefore a concern for many in the sector.

Liz Jenkins, partner at international services firm Clyde & Co, said:

‘Meeting the Chancellor’s ambitious targets will require an available and skilled construction workforce.’

‘In the long term we need to be attracting the next generation of talent into the sector but we have an immediate priority to create the skills we need to deliver new homes today,’ she added.

North West set to Lead House Price Growth in the UK

House prices set to surge in the north, while the south falls behind

The North West of England is set to see the strongest house price growth over the next 5 years, according to a report by leading estate agent Savills, with prices projected to rise by 18.1% between 2018 and 2022.

The region is followed by the North East and Yorkshire & Humberside, where prices are expected to increase by 17.6% in both areas – surpassing the UK average of 14.2%.

On the other end of the spectrum, southern regions are likely to see a more modest growth, as affordability continues to be squeezed in these areas.

The East of England and the South East are both projected to see a rise of 11.5%, while London will only see a small increase of 7.1% by 2022.

According to the company, the next five years is expected to follow the typical market cycle, where a more modest growth in London often leads to a surge in momentum for the North West and the North East.

With these areas being more affordable than the capital, they are more likely to attract first time buyers looking to put down a smaller deposit and avoid a large stamp duty bill.

Rents are generally also more affordable in these areas, compared to the south, which increases the possibility of retaining more graduates in the regions and, in turn, the demand for rental properties.

Commenting on the report, Lawrence Bowles, Associate at Savills, said:

‘Affordability in the capital is already more stretched than the rest of the UK, putting a brake on growth. But areas beyond the Home Counties have potential for growth: incomes have grown more in line with house prices, aiding affordability.’

More Landlords than Ever are now Using Cash to Invest

Cash purchases made by landlords accounted for 65% of all buy-to-let investments in the last 12 months…

Landlords choosing to buy their rental properties with cash are now dominating the UK’s rental market, according to the latest lettings index from the UK’s largest estate agency group, Countrywide.

In the last 12 months, a total of billion was invested by landlords paying for properties in cash, marking a 32% increase over the last decade.

Indicating a shift in attitude in the market, 65% of all buy-to-let property purchases were made with cash in 2017, surpassing the previous peak of 60% in 2011, as well as the 40% share seen in 2007, when the agency started their records.

A driving factor behind the increase in cash purchases is, according to Countrywide, rising house prices, which are allowing investors to remortgage their current assets and invest the equity in new properties.

However, there are regional disparities. The North East contained the largest proportion of cash buyers, which accounted for 78% of all purchases made in the region in the last 12 months, while 58% of landlords in London were still using buy-to-let mortgages to purchase their investments.

In terms of rental growth, the agency reported a 1.2% increase over the last 12 months in Great Britain, when excluding London.

The growth was mainly driven by Wales and the Midlands, where rents saw an upswing of 2.6% and 2.2% year-on-year, while average rents in the capital fell once more.

Commenting on the report, the Research Director at Countrywide, Johnny Morris, said:

‘Landlords have increased their housing wealth considerably over the last 10 years. This means cash purchases are steadily becoming a bigger part of the market…. Rising prices have allowed landlords to take equity out of both their personal or other rental homes to expand their portfolios.’

Empire Property Holdings 3 – Empire Property launch a third loan note

Following on from the success of the first two Loan Notes.

Business Strategy

The Company intends to use the funds raised, to acquire suitable commercial properties, and strategically renovate and manage these assets to achieve the guaranteed returns.

Investment will provide a double digit return on investment, and allow investors to benefit from opportunities in the real estate market without management commitment or concentration of investment in any one property.

Once converted, the properties would become a commercial asset, whose underlying value whilst linked would not be reliant on the variable housing market price index.

The Company plans to take full advantage of current market conditions and acquire assets through the following methods:

  • Initially acquire three commercial properties in prominent towns or Cities
  • The funds will be used to acquire & develop the property into residential accommodation.
  • The properties will be renovated using permitted development rights where possible, or the equivalent full planning requirements.
  • The Company will then liaise with known private, and council letting contacts, to speedily let and manage rooms.

The cost of every project and every future project can be standardised to provide a business plan for each property. The details of each potential project will be input into a feasibility spreadsheet and the viability can be quickly assessed.

The main factors affecting the project are the purchase price of the property and the cost of renovation. Each room is given an average cost to complete, which takes into account all aspects of the renovation, project management, administration, licensing, and liaison with councils.

The only other factor is the purchase price of the room and therefore in each case, we can identify the purchase price of each room that should not be exceeded.

For further information about our track record please see our Done Deals.

Election 2017: UK Vote Results in Hung Parliament

The Conservative Party fails to secure definitive majority after election

UPDATE: 09/06/17 13:30

Theresa May and the Conservative Party are set to form a minority government with the assistance of Northern Ireland’s Democratic Unionist Party (DUP).

Following a closely fought election – and with one constituency yet to be declared – the Conservatives stand 8 seats short of achieving the 326 MPs needed to form a majority government alone.

Following a boost of votes in Northern Ireland, the DUP has entered into an informal arrangement with the Conservatives, to give the two parties a majority of 7 in the House of Commons.

Speaking to the press shortly after asking the Queen for permission to form a minority government, Prime Minster Theresa May, said:

‘What the country needs more than ever is certainty, and having secured the largest number of seats in the General Election, it is clear that only the Conservative and Unionist Party has the legitimacy and ability to provide that certainty by commanding a majority in the House of Commons. As we do, we will continue to work with our friends and allies in the Democratic Unionist Party in particular.’

 

Election 2017 PrinvestUK

 

The vote of the British public has seen the UK wake up to a hung parliament this morning – with no single party securing enough seats to win an outright majority.

The Conservative party has emerged as the largest party in the UK, at the time of writing gaining a total of 317 seats across the UK – but failing to secure the majority mandate that party leader and prime minister Theresa May was looking to achieve when she called the election seven weeks ago.

Labour experienced a significant surge in the polls, building on the number of seats they achieved in the 2015 General Election, to see 261 MPs elected and once more establishing Jeremy Corbyn’s party as the largest opposition in Parliament.

With Theresa May still seeking to secure her position at the head of the next government, and with two seats still to be declared at the time of writing, the Conservatives cannot mathematically reach the 326 seats needed to form a majority government alone and will need to form an arrangement with another party to secure that figure.

Elsewhere in the UK, the Scottish National Party (SNP) secured their place as the UK’s third largest party, with 35 seats gained in Parliament. However, the election marked a substantial loss of seats for the party, with 19 of the constituencies won in 2015 being lost to the Conservatives, Labour and the Liberal Democrats.

Tim Farron’s Liberal Democrats saw a total of 12 MPs elected to Parliament, Plaid Cymru secured a further seat in Wales to bring their total to 4 and the Green Party retained their single seat as co-leader Caroline Lucas extended her majority.

In Northern Ireland, the Democratic Unionist Party (DUP) were able to increase their share in Parliament to 10 seats, whilst Sinn Fein rose to 7 seats.

With Brexit negotiations due to begin later this month, the formation of any government by Theresa May is expected to settled swiftly in the coming days, with the DUP emerging as the likely candidates to form a coalition government in the wake of the election.

EPH2 Launched

Empire Property Holdings was incorporated as a special purpose vehicle, to acquire commercial properties for development into residential accommodation by the Developer, Empire Property Concepts.

Empire Property Holdings is born out of Empire Property Concepts. Empire Property Concepts was set up by Director, Paul Rothwell, in September 2009.

Having already completed his first property investment at University & developed a portfolio with his brother Adam, Paul wished to make his property development formal as a company but also seek investors to provide his services to.

Empire’s progress has been strong, even against the backdrop of difficult economic & property market conditions respectively. The company has continued to market itself well & attract new investors to aid its growth.

Since its inception Empire has grown the product offering to consultancy, Joint Ventures (JVs) and Loans for Property. The latter is used to facilitate the development of projects to be retained as an investment within a special purpose vehicle, and then refinanced to return investors funds.

Empire seeks to market to new investors, and deal with the administration & development cost collection only. Empire has also expanded its team in terms of management, build management, accounts & administration.

Empire is currently developing & managing properties for Paul, his family, DPIL & DPDL, & private consultancy clients. He currently has 600 units under management to include the various aforementioned portfolios & consultancy clients.

Empire has recently developed a 25 unit permitted development conversion called Britannia Inn in Balby, Doncaster, 12 months after acquisition.

EPH2 Investment Profile

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Halifax House

Development 2 – Halifax House

A commercial to residential conversion via full planning permission which will create 65 one bedroom & two bedroom apartments. The development will provide private letting accommodation in a prime location with parking.

  • £1,250,000 – Purchase
  • £2,275,000 – Development
  • £3,525,000 – Total Cost
  • £456,300 – Income (65 x £135 x 52)
  • £5,700,000 – Value based on 8% yield
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Globe Works

Development 1 – Globe Works

A former mill to residential conversion via full planning permission, which will create 24 one bedroom, 90 two bedroom & 10 three bedroom apartments.

  • £1,700,000 – Purchase Price
  • £6,200,000 – Development Cost (124 x £50K)
  • £7,900,000 – Total Cost
  • £1,024,800 – Income (24 x £600 x 12) + (90 x £700 x 12) + (10 x £800 x 12)
  • £12,800,000 – Valuation based on 8% yield
  • £8,960,000 – Refinance exit (70% LTV)