Category

Residential Property

Chancellor offers £3bn fix for Britain’s ‘broken housing market’

By | Residential Property, Social Housing

Philip Hammond’s spring statement includes funding to build 30,000 affordable homes.

A new £3bn scheme will fund the building of 30,000 affordable homes, the chancellor has said, as he proclaimed that the government was on track to reach its target of 300,000 new homes a year in Britain.

Philip Hammond’s spring statement also contained a patchwork of separate schemes to boost housebuilding, including £717m to “unlock up to 37,000 homes” in the Oxford-Cambridge arc, Cheshire and west London.

“The government is determined to fix the broken housing market,” said Hammond. “Building more homes in the right places is critical to unlocking productivity growth and makes housing more affordable.”

Under the affordable homes guarantee scheme – an existing programme that will receive renewed government support – the government does not directly fund new homes but gives a Treasury guarantee to housing associations to allow them to build.

The housing charity Shelter said while it welcomed the boost for affordable homes, borrowing by housing associations would not solve the housing crisis, and the government needed to fund much higher levels of social housing.

Polly Neate, chief executive of Shelter, said: “The government’s decision to renew the affordable housing guarantee scheme is a welcome announcement. This initiative will support the building of more desperately needed social and affordable homes.

“While this is good news, it has to be noted that we can’t deliver social housing on the scale we need on borrowing alone – 3.1m social homes are needed in the next 20 years to tackle the housing crisis at its root and lift thousands of families out of homelessness. We need much more grant funding for social housing in this year’s spending review to get a grip on our ever-growing housing emergency.”

Official government figures show that affordable homes – for sale or to rent – make up a relatively small, but growing, part of the housing supply in England.

In the six months to 30 September 2018, there were 9,909 new affordable homes started, up from 6,989 in the same period of 2017.

The definition of what “affordable” means is controversial. The government defines it as “social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market”. It includes shared ownership homes for sale “provided at a cost above social rent, but below market levels”.

Source: The Guardian

CBRE launches £250m Affordable Housing Fund

By | Residential Property, Social Housing

This month has seen CBRE Global Investors, one of the world’s giant real asset investment managers with $104.5bn in assets under management, launch a £250m Affordable Housing Fund. The investments are from 13 institutional investors, including social investment institution, The Big Society Capital. Twelve out of 13 of the  investors are new to the affordable housing sector. Coming from the UK and Europe, the institutional investors include “pension funds and insurance companies”. Hannah Marshall, Head of UK funds commented, “If you look at Europe, you can see that for many of the Dutch pension funds, it’s already quite central to their agenda; you can see some of the bigger investors actually implementing targets – wanting to have a certain percentage of their portfolio in impact investment within the next five years, for example.”

The Fund will invest in social and affordable rented housing, shared-ownership properties, homeless hostels and housing for ‘key workers’, such as nurses. It is designed to make a social impact, while targeting a 6% total return. Ms. Marshall stated, ‘Our strategy contributes towards our investors ESG targets, and generates a positive social impact as we invest in the funding of homes for those households unable to afford to rent or buy in the open market’.

The Fund will act as a Social Landlord, leasing the properties to Registered Providers, as opposed to setting up their own RP for now. Investments will be sourced from house builders, individual RPs and Local Authorities and will include “both development and buying existing portfolios”.

Impact investing continues to gain traction among institutions into 2019, and the trend remains for investors and real estate fund managers to explore the opportunity within the social and affordable housing sector in the UK. In December, Legal & General Affordable Homes was granted registered provider status, helping push Legal & General’s affording housing initiatives.

 

Source: Investment and Pensions Europe

Investment Week: Sustainable & ESG Investment Awards 2018

By | Residential Property, Social Housing

Best ESG Fund Management Group (Generalist)
Hermes Investment Management – WINNER
Kempen Capital Management
Martin Currie Investment Management
Montanaro Asset Management
Newton Investment Management
Pictet Asset Management
Robeco – highly commended

Best ESG Fund Management Group (Specialist)
Castlefield Investment Partners
DWS Responsible Investments
EdenTree Investment Management – WINNER
HSBC Global Asset Management
Impax Asset Management – highly commended
Kames Capital
Legal and General Investment Management
Liontrust Asset Management

 

Best Environmental Fund
CB Save Earth Fund
Impax Environmental Markets Plc – WINNER
Pictet Global Environmental Opportunities Fund

Best Ethical Investment Fund
Amity UK Fund
CB European Quality Fund
Kames Ethical Cautious Managed Fund
Kames Ethical Equity Fund
Newton SRI Fund for Charities
Premier Ethical Fund
Rathbone Ethical Bond Fund – WINNER
Standard Life Investments UK Ethical Fund


Best ESG Investment Fund

Arabesque Systematic
Davy ESG Equity Fund
F&C Responsible Global Equity Fund
Hermes Global Equity ESG Fund – WINNER
Kempen (Lux) Sustainable European Small-cap Fund
LGIM Future World Gender in Leadership UK Index Fund
Muzinich Bondyield ESG Fund

Best Sustainable Investment Fund
Brown Advisory – U.S. Sustainable Growth Fund
Castel Residential Property Fund
FP WHEB Sustainability Fund – WINNER
Hermes Impact Opportunities Equity Fund
Insight Sustainable Euro Corporate bond fund
Janus Henderson Global Sustainable Equity Fund
Kames Global Sustainable Equity Fund
Liontrust Sustainable Future Managed Fund
Royal London Sustainable World Trust
Wellington Global Impact Fund

Best New Entrant – Fund
Baillie Gifford Positive Change Fund
Castlefield B.E.S.T Sustainable European Fund
Foresight Smart Bonds Fund
FP Foresight UK Infrastructure Income Fund (FP FIIF)
M&G Impact Financing Fund – WINNER
Montanaro Better World Fund
UBAM – EM Sustainable High Grade Corporate Bond
VT Gravis Clean Energy Income Fund

Best New Entrant – Services
Heartwood Sustainable Multi Asset Strategies
Smart Pension
Tribe Sustainable Impact Model Portfolio Service – WINNER

Award for Innovation (Funds)
Amundi Planet Emerging Green One
Castlefield B.E.S.T Sustainable Portfolio Fund
Davy ESG ex Fossil Fuels
HSBC Global Lower Carbon Bond Fund
Mirova Natural Capital Althelia Funds
Pictet Global Environmental Opportunities Fund
RobecoSAM Global SDG Credits Fund – WINNER
Standard Life Investments Global Equity Impact Fund
Threadneedle (Lux) European Social Bond Fund
Trium Morphic ESG L/S UCITS

Award for Innovation (Portfolios)
Canaccord ESG Service
Barclays Sustainable Total Return Strategy
Financial Express Investments – Responsibly Managed Portfolios
Thomas and Thomas Pro-Ethical Portfolio Service – WINNER

Award for Innovation (Non-fund)
Arabesque S-Ray
CPR Asset Management – Risk Management through ESG material signals
ixo Protocol – WINNER
Schroders Climate Progress Dashboard
Thomson Reuters ESG Data

Award for Innovation (Research & Methodology)
BMO Global Asset Management – SDG Mapping and Engagement
Bridges Fund Management – Impact Management Project – WINNER
Davy Asset Management – ESG Valuation Model
Morningstar® Portfolio Carbon Risk ScoreTM
RobecoSAM SDG framework
S&P Global Ratings Green Evaluation
Thomson Reuters Diversity & Inclusion Index
Tribe Impact Methodology
WHEB Asset Management – Impact Report 2017 and Interactive Impact Microsite

Best ESG Research Team
AVPN
BMO Global Asset Management – WINNER
DWS
Hermes Investment Management
Montanaro Asset Management
S&P Global Ratings
Storebrand Asset Management

Best Thought Leadership Paper on Sustainable Investing
AVPN – The Continuum of Capital in Asia – WINNER
Castlefield Investment Partners – Corporate Governance – “Remuneration: Pension Provisions”
DWS – Measuring Physical Climate Risk in Equity Portfolios
EdenTree Investment Management – The Future of Work
Fidelity – Pulling away: Inequality as an ESG risk
Hermes – Modern Slavery: The true cost of cobalt mining
Lazard Asset Management – The Growing Importance of the “E” in ESG / Giving Credit Where It’s Due
Morningstar – Passive Fund Providers Take an Active Approach to Investment Stewardship
P1 Investment Management – Investing in extreme weather conditions
Schroders – Carbon Value at Risk

 

Source: Investment Week 2018

Making sense of ESG popularity

By | Residential Property, Social Housing

The rise of ethical funds and sustainable investment brings into question just how broad and subjective the space can be  

One of 2018’s most-used buzzwords in investment has been “ethical”. The rise in popularity of environmental, social and governance investing has been widespread, and in 2017 more than £1bn of net retail money flowed into ethical funds, the highest annual inflows on record.

As of October this year, ethical funds under management reached £16bn, representing a 1.3 per cent share of industry FUM, according to the Investment Association. In the month of October alone, net retail inflows reached £91m.

So where did it all begin? The origins of responsible investing in the UK date back to efforts of investors who were Quakers, when the society prohibited its members from the slave trade in the 18th century.

The same century saw Methodist figures align their business activities with their faith.

Faith-based investing is one approach to responsible investing. It is for clients who wish to invest in accordance with their faith, and many such investment solutions are available. The most prominent type of faith-based investment is Sharia-compliant investment, or Islamic finance.

As ethical funds have been gaining in popularity, the pressure is on for advisers to be able to understand the sector, and the diverse language that goes with it.

Investing for a better world

Ethical consultancy SRI Services founder Julia Dreblow says the work she has done in the past seven years is centred on how to classify this area of investment so it makes sense for advisers.

The interest of advisers in responsible investing has hugely increased in recent years, she adds.

Heron House Financial Management founder Saran Allott-Davey has been offering advice on investments aligned with her clients’ personal beliefs for 24 years. She too has seen a “significant increase” in clients’ interest as well as the availability of funds.

“I think part of this is due to the  high profile that climate change and plastic pollution have had in recent times and people realising they have to do their part,” she says.

Offering advice on investment solutions tailored to clients’ personal beliefs could be a way for advisers to stand out from the crowd and attract new clients.

Morningstar Europe director of passive strategies and sustainability research Hortense Bioy says that it provides planners with an opportunity to have a deep conversation with clients and connect with them.

She believes that offering advice on responsible investing gives advisers a chance to truly differentiate themselves.

Women and millennials in particular are increasingly asking for advice on investment in line with their ethical principles, she adds.

When it comes to regulation, the European Commission revealed in its Action Plan on sustainable finance that it is seeking to amend Mifid II to require “incorporating sustainability when providing financial advice” over the course of 2019.

It recommended advisers should be required “to ask about, and then respond to, retail investors’ preferences about the sustainable impact of their investments, as a routine component of financial advice”.

In preparation for any potential changes to regulation, advisers will need to have knowledge of the responsible investment landscape and any available investment offerings.

Communicating responsible investing to clients

A good start to map investor preferences is via a simple fact-find. SRI Services offers a questionnaire on its website, asking clients whether they would like to consider environmental, social, ethical or religious issues when looking to invest.

Dreblow believes SRI and ESG issues should be a part of every adviser’s initial fact-find questionnaire.

Advisers should first identify what issues appeal to the client the most based on the questionnaire outcome, followed by a discussion. Allott-Davey says sometimes it is clear straight away that the client is not concerned with aligning their investments with their world views. “And that’s completely fine,” she says.

She adds that when her clients show interest, the next phase is educational. She finds that clients usually have a “basic understanding” of ethical investments. This is where the adviser can step in to help clients navigate the market and introduce what solutions are on offer.

Apart from identifying which issues are close to the client’s heart, advisers and clients should together decide on the most suitable investing style.

Dreblow notes that despite the increase in demand, this area of investing is still rather small and many advisers can get overwhelmed with it.

Similarly, Bioy says that the seemingly robust landscape with a multitude of labels and approaches can pose a barrier for advisers to enter the space. She says that her team is currently finalising a set of tools for advisers to help them learn the industry language. The whole project is set to be completed by early February.

Jargon busting

The oldest and most commonly used approach to ethical investing is to start with a negative screen. This takes all stocks available and removes the ones that do not invest in line with the manager’s strategy. It is individual to each fund manager but can cover areas such as tobacco, arms, gambling, and can exclude companies based in countries they believe to have a repressive regime.

Dreblow explains that there are many different styles of responsible investing. She says: “Someone could look at climate change and say: ‘We need to avoid oil or mining companies’. Others would say that a better strategy would be to hold shares of a company and talk to them and encourage them to reduce their emissions.”

According to Dreblow, both investing styles – negative screening as well as responsible or active ownership and engagement – complement each other.

“They can work well together. From a company’s perspective, if [the company] thinks that people might sell their shares, then it is more likely to respond to engagement.”

Bioy calls this an “ESG value contrarian approach”, in which the manager looks for companies with low ESG ratings and an assumed potential of future increase in these scores.

ESG versus impact investing
Choosing investments with ESG issues in mind is not strictly a goodwill act. It can have financial incentives too.

As Bioy points out, excluding (for example) tobacco firms can make sense from an investing perspective as changes in consumer preferences, as well as trends in regulations, suggest that these firms are on the decline and do not hold much promise of future rewards for shareholders. The same goes for oil companies, she says.

Investing in companies which score well on environmental (such as carbon footprint), social (human rights or working conditions), or governance (this can include, but not limited to, gender equality) issues can be a savvy investment decision.

Bioy says: “Studies have proved that companies with good ESG ratings provide higher returns.”

Impact or thematic investing (investing which focuses on companies actively trying to find solutions to the world’s stinging challenges like a shift to renewable energy or waste and water management) are more likely to provide shareholders with returns than past winners like oil firms. Bioy says that the future is already happening; electric cars could fully replace petrol- or diesel-engine cars in two decades.

The final step for advisers is to identify the best fund options. SRI Services offers a comprehensive list of such funds, while Morningstar has a sustainability rating which evaluates how well companies in a fund’s portfolio are managing the ESG investing factors relevant to their industries.

With inflows continuing to go through the roof and more providers creating ethical offerings, it is one area that advisers must fully understand and be prepared for when talking to clients.

Source: Money Marketing

UK house prices pick up amid ‘subdued’ market

By | Residential Property

Values rise by 0.3% in November – but few predict rapid growth in short-term

House prices inched ahead in November but Brexit uncertainty has left the property market “relatively subdued” according to Nationwide building society.

The average UK home rose in price by 0.3% month-on-month, pushing the annual rate of inflation up to 1.9%, up from 1.6% the previous month. The average home now costs £214,044.

However in cash terms the average price of a home in the UK actually fell by nearly £500 on the month, but because of seasonal adjustments used by Nationwide, its index recorded a rise.

The direction of house prices will be heavily dependent on the outcome of the Brexit vote on 11 December and what emerges after that. Nationwide said that if the uncertainty lifted, then prices were likely to spring back.

Its chief economist, Robert Gardner, said: “If the uncertainty lifts in the months ahead and employment continues to rise, there is scope for activity to pick up through next year.

“The squeeze on household incomes is already moderating and policymakers have signalled that, if the economy performs as they expect, interest rates are only expected to rise at a modest pace and to a limited extent in the years ahead.”

But the Bank of England’s warning this week that house prices could tumble by 30% following a no-deal Brexit is already having an impact on the market, according to property experts.

Jonathan Hopper, managing director of Garrington Property Finders, said: “While the ‘armageddon’ scenarios run by Mr Carney will be brushed off by many as unlikely, they will further sober the thinking of over-optimistic sellers and cautious buyers.

“For now, his comments have served only to dial up the uncertainty – and the pattern of subdued business-as-usual continues.

“Despite the shortage of homes for sale, a steady stream of strategic buyers are pouncing on buying opportunities that may not be around if the market normalises in 2019.”

Nationwide highlighted how the supply of housing was improving after a decade in which Britain had not built sufficient housing for a growing population.

It said: “After falling by almost 60% in the wake of the financial crisis, there has been a significant pick-up in construction in recent years. New-build completions in England in 2017/18 reached 195,300, around 3% below 2007/08 levels.”

It added that once additional dwellings were counted – particularly from the wave of office-to-residential conversions, then housebuilding has virtually returned to peak 2007 levels. In total, 1.9m dwellings have been built in England since 2007, representing an 8.5% increase in the total stock of homes.

Source: The Guardian

People should be proud of their council house – Theresa May

By | Residential Property, Social Housing

People who live in council houses should be made to feel proud of their homes, Theresa May has said.

The PM announced £2bn to build new homes in England, in an attempt to remove the “stigma” of social housing.

Under the plan, housing associations, councils and other organisations will be able to bid for the money to spend on new projects, starting from 2022.

Labour said the announcement fell “far short” of what was needed for the social housing sector.

BBC home editor Mark Easton said the government hopes the money will allow local authorities and housing associations to build schemes that would otherwise seem too risky.

He said the sector’s calls to provide more confidence about future funding – so the 300,000 extra homes required in England each year can be built – had appeared to have been listened to.

Mrs May told a National Housing Federation summit in London: “Some residents feel marginalised and overlooked, and are ashamed to share the fact that their home belongs to a housing association or local authority.

“On the outside, many people in society – including too many politicians – continue to look down on social housing and, by extension, the people who call it their home.”

She will encourage housing associations to change how tenants and society view social housing.

“We should never see social housing as something that need simply be ‘good enough’, nor think that the people who live in it should be grateful for their safety net and expect no better,” she said.

“I want to see social housing that is so good people are proud to call it their home… our friends and neighbours who live in social housing are not second-rate citizens.”

In mixed developments, she said it should be impossible to tell the difference between full-price and affordable housing, which should not be “tucked away out of sight and out of mind”.

David Orr, chief executive of the National Housing Federation, said the prime minister’s announcement was “extremely welcome”.

“This represents a total step change. For years, the way that money was allocated meant housing associations couldn’t be sure of long-term funding to build much-needed affordable housing,” he said.

He said that by changing the way the funding was allocated, ministers had given “long-term confidence and confirmed that we are trusted partners in solving the housing crisis, building new homes and communities”.

But shadow housing secretary John Healey said the reality was spending on new affordable homes had been “slashed” and the number of new social rented homes built last year “fell to the lowest level since records began”.

“If Conservative ministers are serious about fixing the housing crisis they should back Labour’s plans to build a million genuinely affordable homes, including the biggest council house-building programme for more than 30 years,” he said.

The English housing survey for 2016/17 reported that 3.9 million households – about nine million people – lived in the social rented sector, which was 17% of households in the country.

The funding covers the next spending review period, from 2021 through to 2028.

Downing Street said the money was separate to the £9bn of public funding put toward the existing affordable homes programme until 2022.

Source: BBC News

UK inflation hits six-month high of 2.7%

By | Residential Property

The UK inflation rate unexpectedly rose in August to 2.7%, the highest level in six months.

Economists had expected a Consumer Prices Index rate of 2.4%. The pound rose after the data was released by the Office for National Statistics.

Wages are still rising more than inflation, with data last week showing wages, excluding bonuses, grew by 2.9% in the three months to July.

Rising prices for recreational goods, transport and clothing drove the rise.

In July, CPI was 2.5%, which had been the first jump in the index since November.

Mike Hardie, head of inflation at the ONS, said: “Consumers paid more for theatre shows, sea fares and new season autumn clothing last month.

“However, mobile phone charges, and furniture and household goods had a downward effect on inflation.”

inflation

Prices rose less sharply for furniture, household goods and communications.

The year-on-year rise in CPI in August meant that inflation was narrowing the gap with wage increases, with economists waiting for the August earnings figures.

“Today’s inflation data show the rate of price growth accelerated in August, and may well prove to have exceeded total earnings growth in the same period. Unless UK workers can increase their productivity, this trend is likely to continue – squeezing living standards over the medium term,” said Alastair Neame, senior economist at the Centre for Economics and Business Research.

Sterling rose to $1.32 following the news, its highest level since July.

“The numbers reinforce expectations that policymakers will gently lift interest rates over the next couple of years,” said Ben Brettell, senior economist at Hargreaves Lansdown.

Theatre tickets

The Bank of England raised its key interest rate for only the second time in a decade last month. The current interest rate of 0.75% is the highest since March 2009.

It has also forecast that inflation will fall back to the target rate of 2% by 2020.

“The figures won’t come as welcome news to the Bank of England, though – they’ll be desperate to leave policy unchanged until we get some clarity over Brexit and won’t want to be forced into a rate rise by accelerating prices,” said Mr Brettell.

The CPI measure reached 3.1% in November 2017, when price rises were fuelled by the weakness in the pound following Brexit vote.

In August, the largest change in prices was in the cultural services sector, where theatre tickets rose, and also games, toys and hobbies, while prices for computer goods rose after falling a year ago.

Temporary rise

The ONS said transport costs as a component of inflation increased, largely because of rises in sea and air fares. Petrol prices, though, rose by 1.4 pence between July and August, less than the 1.8 pence rise of a year earlier.

The average price of clothing and footwear rose 3.1% between July and August, faster than the 2.4% a year before. While clothing prices usually rise between July and August, the ONS said women’s and children’s clothing drove the rise.

Howard Archer, chief economic adviser to the EY Item Club, said the fact that the inflation rise was fuelled by reaction and cultural goods meant it would be temporary.

“We would expect this to unwind in next month’s release,” Mr Archer said.

The Retail Prices Index (RPI), a separate measure of inflation, was 3.5% in August, up from 3.2% in July.

Source: BBC News

Two years since Brexit, how has the vote changed the UK property market?

By | Residential Property

It is now almost exactly two years since the Brexit referendum (23rd June 2016) and coming up on 18 months since the triggering of Article 50 (28th March 2017), this means that there is now a reasonable amount of data on which to form a view of how Brexit has impacted the property market.

The property market before the Brexit referendum

With the benefit of hindsight, the UK housing market turned out to be something of a canary in a coalmine for the financial crisis of 2008. It took a sharp downturn in 2007 and needed an unusually-long five years, to get back to its pre-crash peak. This, of course, was against a backdrop of highly interesting times in the mortgage market since the events of 2008 caused lenders to ram hard on their lending brakes and regulators to start taking a keen interest in mortgage-lending practices.

What we now know as the Mortgage Market Review actually began in 2009, but it took until 2014 for it to be fully implemented. There is a case for viewing the MMR as the unofficial end to the period of chaos, since it gave lenders formal, regulatory clarity over what was expected of them and hence laid the ground for the market to carry on its standard, forward march on orderly terms, which it did, right up to the Brexit vote.

The property market in the aftermath of the Brexit referendum

It seems likely that the aftermath of the Brexit referendum will be etched into the memory of many people. Stock exchanges dropped, Sterling dropped and, of course, the housing market dropped. After the initial panic subsided, however, markets, and the humans behind them, began to settle and move on again.

The property market now

While the goings on in UK politics have provided plenty of fodder for political journalists, the present condition of the UK property market essentially reflects two fundamental contradictions. Firstly there is hesitancy over Brexit and, it has to be said, over recent changes to the buy-to-let market.

Secondly, there is the indisputable fact that the UK has an undersupply of property in general and residential property in particular and that there would either have to be a significant exodus of people from the UK or a significant number of houses built in a very short space of time (or some sort of combination of them both) for this imbalance to be addressed in any meaningful way.

The result is that overall; UK property continues to increase in value, albeit at a slower pace. This headline fact, however, skims over the fact that the UK property market’s is actually a collection of different markets with different dynamics and different degrees of exposure to Brexit. For example, the London residential market is currently stagnating (although not crashing), whereas the London commercial property market is still holding its own and both the residential and commercial markets in the north of England and other parts of the UK continue to do well. In short, while the eventual form Brexit takes is currently anyone’s guess, the need for housing in the UK is simply not going to go away and therefore neither will opportunities for property investors.

Source: Global Property Guide

The Growth of Socially Conscious REITs

By | Residential Property, Social Housing

The REIT brand is recognised and trusted globally – so let’s use it as a force for good in creating vibrant places, writes Jenny Brown, of Grant Thornton.

Real Estate Investment Trusts (REITs) have continued to rise in popularity since they came into force in January 2007.

Within a month, nine of the UK’s largest listed property companies had converted to REIT status and, fast forward 10 years, there are now more than 70 UK REITs.

A REIT can offer significant benefits for investors and operators alike.

The brand is recognised and trusted globally, with most major economies having an equivalent regime.

There has been a marked increase in the number of REITs coming to the market in the last five to six years, with more than 30 new REITs listing on the London Stock Exchange and raising more than £12bn of equity.

Our latest report, REIT’s as a force for good, shows that many new REIT’s are now focusing on specialist sub-sectors, such as healthcare and social housing, which meet increasing demand from investors for both a financial return and an investment that focuses on property with a social value.

The potential for REITs to meet the need for new homes in the current climate is gaining increasing interest.

A sustained shortage of government funding has forced many housing associations to take on more debt in order to develop new homes.

With the government’s aim of building 300,000 new homes each year, REITs offer investors an opportunity to be part of a financial solution to help provide more social and affordable housing by partnering with housing associations in innovative ways.

A number of new REITs are already emerging that are focused on residential property and they have seen strong demand from investors.

REITs potentially offer investors better returns than they would achieve by investing directly in the properties themselves, as well as the security and liquidity of the REIT structure.

REITs are well suited to act as the owners of property assets with a social role, by working in partnership with operators.

The collaboration between the two can provide property management expertise to complement the expertise of either public or private operators.

The lesson we can take from looking at international markets is that the government can do a lot to help stimulate investment in this area through the tax system.

Australia is facing an affordable housing shortage so the government has introduced new tax concessions to encourage REITs to invest.

Similarly, in Canada, a number of REITs focused solely on residential property are supported by significant tax advantages and these REITs have delivered some of the highest returns across the stock market.

All those involved in the UK market need to continue to build and maintain effective partnerships between REITs, developers and operators and focus on collaborating effectively.

The combination of their different expertise is vital to supporting innovative high quality schemes with a social purpose.

That will only happen if we raise awareness of the potential for REITs to deliver long-term social benefits and educate both investors and operators about the risks and rewards of the structure.

These partnerships will be able to seize the significant opportunity for REITs to build on their success and become a force for good in creating vibrant places in which people can thrive by meeting the country’s housing needs.

Government can also help support these developments by looking at further reforms to the REIT regime to widen the permitted activities in which they can invest.

Source: Jenny Brown, chief not for profit operating officer, Grant Thornton UK

UK energy efficient social housing project hailed by designers

By | Residential Property

An energy efficient social housing project currently under construction in Norwich, UK, has been hailed by designers for its application of the Passivhaus standard.

The development will include 105 homes, 56 of which will constitute one-bedroom flats and the remainder of which will comprise a mixture of two, three and four bedroom flats and houses. This makes the development one of the largest energy efficient social housing schemes under construction in the UK.

The project is expected to complete construction later this summer, and has been lauded as one of this year’s ten greatest architecture projects in the world by The Times. Speaking to the Eastern Daily Press, Gail Harris, cabinet member for social housing at Norwich City Council, welcomed the announcement.

She said: “To be named, alongside some of these multi-million pound projects around the world, shows we have got vision and that we have driven it forward. What The Times said is recognition of what a good design it is and this is something quite special.”

What makes the new buildings energy efficient?

The new homes are under construction to a Passivhaus building standard, which means that they reach the highest certifiable standard of energy efficiency. This results in ultra-low energy buildings which take advantage of heat naturally generated within the home, so that they consume significantly less fuel for heating or cooling.

These buildings are therefore more eco-friendly, and will also save homeowners money on fuel bills. As an energy efficient social housing project, this opportunity to save money on fuel is vital. Harris added: “We know we have got a large amount of fuel poverty in the city and we know some people have had to make choices about whether to eat or heat their homes. This sort of development eases those problems.”

Elements of the Passivhaus building standard which facilitate this saving include:

  • Extra-thick insulation;
  • Triple-glazed windows and doors;
  • Heat recovery ventilation systems; and
  • Systems to prevent thermal bridges and air leakage.

The ventilation systems in question allow fresh air into the house, but prevent any from leaking out. The design also avoids thermal bridges, including pipes through which heat travels and can easily escape from other, traditionally designed buildings.

Source: Government Europa

 

THE INFORMATION ON THIS WEBSITE MAY NOT BE DOWNLOADED, FORWARDED, TRANSMITTED OR SHARED WITH ANY OTHER PERSON EITHER IN WHOLE OR IN PART WHERE TO DO SO WOULD OR MAY CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF ANY JURISDICTION.

By clicking AGREE below you:

  • confirm that you have read, understood and agree to be bound by the terms of the notice set out above;
  • confirm you are accessing the information contained within this website for information purposes only;
  • agree to the exclusion by Fundmentum Property Limited, to the extent permitted by applicable law and regulation, of any and all liability for any direct, indirect, punitive, consequential, incidental, special or other damages, including, without limitation, loss of profits, revenue or data arising out of or relating to your use of and our provision of this website and its content;
  • warrant and represent that you are not a resident of, or otherwise located in, any jurisdiction where accessing the information would constitute a violation of the relevant laws or regulations of that jurisdiction (and are not acting on behalf of any person resident or otherwise located in any such jurisdiction) and that you are permitted to proceed to the website; and
  • agree that you will not transmit or otherwise send (directly or indirectly) any information found on this website to any person in any jurisdiction if to do so would breach applicable law or regulation.

If you disagree with the above, you are not permitted to proceed to view the information contained within the website. If you are in any doubt as to whether you are permitted to view the information on the website, please select the back button on your browser.