Investors need to know that build-to-let is NOT the only option. If a competitive yield is what they are after then I certainly believe we have the solution. We have a model that has gone through independent due diligence and has been developed with institutional investors for institutional investors!

Traditionally lower yields in residential property are due to contributing factors such as maintenance costs and voids. By being able to source and provide a good quality long term responsible tenant – we know we can help keep the yield higher.

The report also revealed that institutional investors rely on an income-generating model rather than a model based on capital growth – well how about a model that offers both?

Interested parties should definitely contact me direct to talk about our co-investment residential model.  My team and I are pushing to tip the balance and welcome those that are ready to make the move with us.

david.toplas@millgroup.co.uk

Currently the UK’s population is c7.9m people, but according to the report this is set to grow by c12% over the next 20 years. We will require therefore around 32,600 new homes every year just to keep up.  The report highlighted nine factors that make the London housing market unique: tenure, type of home, housing need, population churn, inequality, diversity, international influence and the office and powers of the Mayor of London. Its recomendation included the exploring of some more novel roles for Registered Social Landlords (RSL’s) in the provision of new properties. Traditional housing models are either under stress or broken and we need a paradigm shift in thinking that will bring new investment in innovative housing solutions.

The re-election of Boris Johnson as Mayor of London surely is an opportunity to push Housing to the top of Londons political agenda.

At Mill Group our focus is currently on innovation in housing supply leading to long term sustainable change, and we continue to work on launching our Investors in Housing programme which allows institutional investors to benefit from a sound investment proposition, whilst helping the UK Housing market.

Do get in touch to find out more.

The Committee sets out four key areas for action, which, taken together, could go a long way to raising the finance needed to meet the housing shortfall:

• Large-scale investment from institutions and pension funds
• Changes to the financing of housing associations, including a new role for the historic grant on their balance sheets
• Greater financial freedoms for local  authorities
• New and innovative models, including a massive expansion of self build housing

Institutional Investment

The Committee finds that large institutions and pension funds, which have only ever made a limited contribution to new housing, could provide a substantial source of investment.

“We should be looking to new forms of investment to help address the housing shortfall.  Pension funds and large financial institutions have a blind spot when it comes to housing but could deliver a significant number of new homes for rent and achieve a steady return on their investments.  Public sector bodies and housing associations must encourage such investment.”  adds Clive Betts.

Read CEO David Toplas’ view on the report

I am absolutely delighted that in response to our oral and written evidence, the committee has concluded that “There may be some merit in introducing a version of the NewBuy Guarantee to underwrite investment” and that it recommends that the Government bring forward proposals to establish such a scheme.

It is our belief that the future of housing supply rests in the hands of institutional investors, including Local Authority pension funds. They are the only viable source of genuinely new financing for housing in a climate of continuing mortgage restraint.

However, investors are cautious by nature and need reassurance that housing can deliver their expected returns. A form of underwrite by the Government will have a major influence on investors’ willingness to support new housing models.  As the Committee acknowledged, these new models are needed.  It is recognised that once a new model has been successfully trialled investors will be much more willing to engage and the potential additionality for public policy – in employment, construction, regeneration and local businesses – could dramatically multiply the value of their perceived risk.

Was this written in the 1950s or the 2010’s? Is the fate of these two scenes…

1950s tower block

East Village, London Olympics 2012

… a wrecking ball or dynamite end as below?

Are we making the same mistakes all over again, of thinking we can create a better community than lived there before?

Are we assuming once again that people like living on top of each other? Yet again, are they trying to turn the London property mantra of… “West is Best and East is Least” into “East is a Feast and West is Yest…erday”?  Is the idea of creating a vibrant and horizontally based community just glossy marketing spin? I have already mentioned the on-site welfare facilities and epic shopping and leisure facilities, but we now also have reports of indigenous ethnic relocations from Newham to Stoke on Trent – well it all sounds a bit familiar to me, except previously the migrants could get off the West Coast Mainline at the little village of Milton Keynes …

Add in – rocketing land values, lack of available housing, areas of incomparable deprivation, above average levels of unemployment, social housing stretched to breaking point and here we are getting a glimpse of post Olympic London exactly 64 years apart, with the same background issues but conveniently with very few of those original residents still alive to recount their tales – is there any other raison d’etre behind the decision to build up – what do you think?

What legacies of past Olympics can we draw from?

After the fiasco of the Atlanta games in 1996, where athletes themselves questioned whether they were there “…to compete or commute” after two hour bus rides to venues – distance mattered. Sydney solved the problem by building the athletes village requirement both harbour side in creating attractive premium priced apartments near the old city abattoir, which was demolished to make way for the Olympic site. They also used demountable chalets that your average Australian could buy flat packed afterwards, stick them in the back of their UHT (Australian term for a car-based pick up truck) and erect in their garden commonly called the “outback” – they really did think about the economics and decided against the gamble of major development risk.

Best not delve too far into the last Olympics in Athens in 2004, and the economic melange that exists today – put simply they couldn’t afford to put the show on, and I am surprised that most commentators have not yet seized on the staging of the XXVIII Olympiad as a component part of their current economic problems.

When you compare this with the dazzling investment and reported corruption that surrounded the Beijing Games in 2008, perhaps that was more of an event for the cameras and politicians, as certainly the legacy benefits of the athlete’s village were confined to the affluent few, rather then the communist many.

It is interesting to note that in an era where the mention of development risk sends bankers running away to hide in the nearest City bar, that the organisation that has bought the Athletes Village (now renamed the East Village and saddled with the postcode from EastEnders), is a Middle Eastern sovereign investment house, which collects trophy buildings and businesses more as a hobby.

As Wellcome Trust’s not for profit bid came second, I am not really sure that this is a philanthropic venture. When you add the investment nous of conjoining the Qataris with a member of the Ritblat dynasty in the form of Jamie and his financially astute Delancey, I leave it to you to decide whether this is a cash cow for the investors or a vibrant community for those persuaded to join the post Olympic dream…again?

The Olympics are an exciting time for the sporting world but their impact has further-reaching consequences than sporting camaraderie and banter. Rental in the Olympic village and surrounding boroughs has already spiked and a house to rent in London can cost you as much as £433,000 per month in the London borough of Mayfair.

Housing activists and concerned residents have already reported that landlords have put up rental flats rates and the incoming effect of Olympics on the London property market is making the current housing crisis even worse. Prices have soared and foreign investment in London’s luxury property market have also shot up with many investors looking to see-out the financial crisis with a sure foot in the long-term future.

Such diverse economic situations have created a substantial divide that is bringing the housing situation to the forefront of the nation’s concerns as the increasing number of international visitors arrive for the 2012 games and create a competitive and demanding rental market for local homeowners and residents alike.

Despite the Olympic village boasting accommodation for 22,000 athletes and 6,000 coaches, the Olympic influx is said to put severe pressure on rental accommodation with more than 11 million sports fans and journalists on their way.

Locals are already considering leaving the capital for the July-August period – not only to escape the overcrowded streets in the Olympic area and the effect on travel, but to make a quick turnover by offering a house to rent in London to the incoming hopefuls. Landlords are cashing in on the expected influx and are setting rental prices up by more than six times the original asking prices.

Alternative hotspots for Olympic enjoyment

Although the Olympic Games are set to take place in Stratford, East London, there are numerous other Olympic sites that are as equally enticing as the E20 hotspot. Wales is using the Games to promote the sustainable involvement of Wales and Welsh culture in the Olympic festivities, and although rental is rising for this period, it’s not rising as significantly as London’s accommodation rates. The views are spectacular and the company is friendly, with many excellent transport links to serve throughout the sporting festivities.

Among the thirteen areas included in the Nations and Regions group are the East of England, Scotland and Yorkshire and Humberside. All of these locations are actively involved in promoting the Olympic spirit with events and special tourist attractions set to create a lively atmosphere throughout the Games.

What to look for when you’re renting in London

Finding rental property is a real challenge for Olympic visitors, but you can save yourself a small fortune by looking at properties further out. The Olympic stadiums are well-served by local and regional transport links making it easy to commute.

Other options would be to consider a longer rental period as landlords might be willing to lower the exorbitant fees associated with short-term rentals for a longer period so that they avoid the hassle of finding a new tenant after the Olympics.

Lisa Elliot is a freelance journalist and Editor of Property Market Update which provides up-to-date and upfront news regarding the British and global property market.

Well today, parents all over England are finding out if their children have got into one of the six preferred schools of their choice. On the Today programme on Radio 4, John Humphrys heard from a London headmaster stating that there had been 369 applicants for only 60 school places this year. It is true to say that the demand for places across England is  increasing, but it seems the predictions are also being borne out that families are indeed staying put in London skewing the demand for school places. So with rising demand for school places, healthcare and homes and the housing supply shortage the problem is ever present.

At Mill Group our focus is currently on innovation in housing supply leading to long term sustainable change, and we continue to work on launching our Investors in Housing programme which allows institutional investors to benefit from a sound investment proposition, whilst helping the UK Housing market.

Property Wire published Halifax’s new FirstBuy mortgage rates on Monday and we see that it is not cheap.

• Two year fixed mortgage at 5.99% with a £999 fee
• Two year fixed mortgage at 6.39% with no product fee

We also understand that the majority are more likely to be closer to 90% LTV rather than 95% and that the credit rating requirements will be extremely stringent.

We want this initiative to succeed as we are in favour of any action that will help boost the housing market. But will FTB’s be able to access or afford FirstBuy?

We’ll continue to monitor!

Over 6,000 UK adults, including private rental tenants, homeowners with mortgages, shared equity stakes, owner occupiers and those living rent-free participated in this exclusive research.

• Nearly half (45%) of 18-34 year olds list deposit affordability as the biggest
  barrier to buying a property
• Only a third (32%) of private rental tenants are ‘happy where they are’
• Only 5% of survey respondents are delaying buying a property because
  they expect house prices to fall

Homeownership aspirations remain high throughout the UK and across all ages, with only a third (32%) of private rental tenants referencing happiness with their current property as a reason for not moving. Of those renting, over half (56%) of tenants cited deposit affordability as a barrier to getting on to the property ladder.

Residential Property Investment has been overlooked by pension funds for too long, says David Toplas.

Residential property is recognised as an attractive and proven asset class. Despite being a low risk income generator with capital growth the sector is lacking a choice of viable routes to market that can deliver investor expectations, not least for those that want to shake off the historical association of residential investment with development delays, yield leakages and uncertainties.

Investment indices and total return performance measures available from IPD demonstrate that, over the last 10 years, residential property is the only asset class that delivers a positive reward.

Mill Group has spent considerable time researching and understanding the specific needs of institutional investors and has developed a new approach that will open up the market to institutional investment in residential property offering scale, with minimal risk, minimal management costs and greater certainty.

Now is the time for Institutional Investors to play an increasing role. However, it must also be understood that they will only do so if the opportunity is there and it makes investment sense.

For decades, the fundamental problem has been that the housing market has lacked any real innovation. The mainstay models are severely restrained by forthcoming legislation and likely to remain so for several years to come. With this uncertainty despite demand for housing being at its highest and supply at its lowest, we face an immediate housing crisis. The consequence is rising rents and a 1,000,000+ backlog in mortgage applications.

New ideas are required to attract new money into the sector on a long term, sustainable basis to tackle the supply shortages and to release this pent up demand thus promoting further growth in the economy. Institutions must play a bigger role. The question is: How can the residential property investment market be made more accessible and attractive?

Read the full article here