In our lead article this month on page 14, we focus in on the progress of the Build to Rent (BTR) sector, which has been consistently portrayed as a partial solution to the UK’s ongoing housing supply crisis. The fan club for BTR comprises some vested interests who regularly talk bullishly about how it is prospering and with many billions of pounds being invested. Our analysis would suggest it’s not quite the success story that the advocates of BTR want us all to believe.
What is a factual reality, is the slowing of house building supply and of planning applications from developers who’ve taken a look ahead and delayed making commitments to build until the prospects for house sales improve. The recent Competition and Markets Authority (CMA) report debunked the myth around ‘land banking’, but also confirmed that the main problem is with the planning system, which is undeniably ‘broken’ and with small to medium (SME) developers being the most impacted.
Step forward Chancellor Hunt, who in what is very likely to be his final Budget, decided on the 6th March to attack the furnished holiday let (FHL) sector a.k.a. short lets / serviced accommodation. I’d suggest readers regularly looking out for ‘below market value’ (BMV) deals won’t have to look too far for a new source of motivated sellers in the upcoming months. Jeremy Hunt’s cutting of CGT by 4% in the Budget to 24%, will also likely lead to some in the FHL sector deciding their net post tax profit prospects are not so rosy as they were just a few years ago during the ‘staycation boom’ of 2021-22.
Our main investor interview this month is with award-winning property developer Immanuel Ezekiel, who recounts the trials and tribulations he had to deal with in the last four or so years on two projects. Those who portray property developers as being parasites etc, should realise it’s a business full of potential risk factors and with profits far from being guaranteed. My thanks to Immanuel for his frankness and his stated desire to help others to learn from his experiences over the decades as a developer.
On page 22 David Kemp our regular contributor on planning and development explains in detail about the government’s agenda with the upcoming consultation for ‘short lets’, with changes to permitted development and for a new use class.
Another sub sector which has been portrayed as being a route to riches in recent years has been social housing and on page 28 Adam Lawrence offers his thoughts about current prospects for investing in this niche area.
Finally I’d also recommend a read of Suzy Carter’s article on page 36 and if you have now mastered the art of scanning a QR code, do check out the short video clips at the end
of the article.
