UK Residential

Comment

Comment by Martin Skinner on September 27, 2010 at 10:52am

Agreed on the planning - new use class could be beneficial - this in line with the BPF's campaign.

Institutions require an incentive though and consider themselves disadvantaged compared with private investors at present because when they buy a block of built units they have to pay say 4% for stamp duty on the lot whereas an individual investor buying one of the units within the block would be paying say 1%. If this were changed to be payable on say the average of the individual unit values in return for committing it to a long term (say 10 years) commitment to rental it could attract more investors.

There might be scope for institutions to take long term leases then while outsourcing the management to 'branded' providers that take some of the margin risk/reward.

Comment by John Corey on September 25, 2010 at 5:00am

I am not sure that there needs to be a change in stamp duty for multi-family residential to take off. The properties are priced like commercial so the stamp duty impact is no better or worse than any other commercial transaction.

What can be done is to handle the planning differently so that the property built as a rental cannot be easily sold off to owner occupants. A way to keep the housing as rental housing. Similar to how student housing blocks are purpose built and not planned to be converted into more traditional residential.

Comment by Martin Skinner on September 25, 2010 at 4:41am

The British Property Federation (BPF) has long been calling for stamp duty concessions (so an institutional investor buying 1,000 flats to rent will pay the same %age stamp duty as a private investor buying 1 flat) and a separate use class to encourage exactly this.

Personally I don't see it happening any time soon but expect it to emerge eventually.

Comment by John Corey on September 25, 2010 at 4:34am

Does anyone expect to see multi-family residential (apartment buildings with one owner) developing as a distinct sub-sector? In the US the multi-family residential asset class is rather distinct. It is valued using commercial terms (income approach) and there is little to no impact from the owner occupied market in terms of valuation.

The Labour government had some proposals to develop the class/sector. A couple of insurance companies were looking into the opportunities. With the shift triggered by the constrained mortgage market, more people will rent long term rather than become owners.

Comment by Martin Skinner on September 24, 2010 at 3:51pm

Risks relating to the withdrawal of support/employment from the public sector are higher outside London and the South East and areas don't benefit from the global appeal the capital has.

That said the supply:demand imbalance looks set to become acute throughout the UK in the years ahead and my expectation is that the result will be residential rents rising at an above inflation rate for the foreseeable future - in stark contrast to most commercial property sectors.

What do you think the key trends will be in the next couple of years? Build to rent/branded accommodation? Residential REITS? Sustainable outperforming?

Comment by John O'Mahony on September 24, 2010 at 3:06pm

Whilst recognising the obvious attraction of London to investors, there are nonetheless many sound opportunities out side the capital for investors to widen their net so to to speak with diversification into new build sustainable technologies which are also affordable. I would welcome any comments or feedback from the group.

Comment by Martin Skinner on September 24, 2010 at 1:39pm

Welcome to the group John !

I'm keen to get some more activity going on here so please do post your thoughts/blogs etc.

Best,


:) Martin

Comment by John O'Mahony on September 23, 2010 at 9:55am

Excellent idea in the present climate to take more direct informed views on this sector

Comment by Martin Skinner on April 10, 2010 at 8:26am

Thanks Miles!

Feel free to drop in a bit of info about the sort of things you're looking for (types of finance, locations of sites etc) and it may be that the other members could help to find solutions.



:) Martin
www.twitter.com/martinskinner

Comment by Miles Harvey on April 7, 2010 at 9:01am

Well done Martin.

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