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  • The Property Partner UK residential property index showed a total return to investment of -0.64% in February, with capital growth of –0.89% and a net income return of 0.25% for the month.
  • Over a 12-month period the total return was 3.05%, with capital growth of 0.07% and an income return of 2.98%.
  • The index measures the change in average house prices and rents from the Land Registry and ONS, applying deductions for operating costs and refurbishment to generate a net total return to investment. It uses the latest figures available.
UK property market
index performance
at 28 Feb 2019
Income
return

Capital
growth

Total
return

Rental
growth

Monthly return0.25%-0.89%-0.64%0.11%
Annual return2.98%0.07%3.05%1.08%
5-year average
annual return
3.16%4.24%7.52%1.78%
10-year average
annual return
3.36%3.20%6.66%1.60%

UK residential property continues to demonstrate positive performance, with an annual total return of 3.05%, albeit below the longer-term trend level of 7.5% p.a. seen over the past five years, due to slower house price growth.

On a regional basis, Wales was the strongest performing region over the past 12 months with a total return of 6.34%, while London delivered the lowest return of -1.35% due to weakness in the prime end of the market.

UK residential market trends, February 2019

The UK residential property market continues to remain resilient in the face of broader market uncertainty.

Average house prices stood at £225k at the end of February, according to the Land Registry UK HPI based on all UK property transactions. This represents an increase of 0.6% over the previous 12 months, below inflation (CPI 2.2%) and below the long-term house price growth trend of (7.5% p.a.). This suggests political and economic uncertainty has begun to have a more noticeable impact on the housing market, albeit with prices still increasing at a low rate.

The average cost of renting property increased fractionally to £865 in March, with annual rental growth steady at 1.1%. This is below the longer term trend of closer to 2% per year, as well as wages and other prices in the economy, indicating that the real cost of renting has reduced slightly in the past year, on average across all regions.

The overall UK residential sales market remains active in spite of the regular reports of slowing listings and buyer demand from traditional estate agents, hinting at increased competition in that industry and a focus on London, where activity has dropped off noticeably.

96,300 residential transactions were registered in November, a 0.4% increase on March 2018, bringing the total number to almost 1.2m over the course of 12 months. This is -1.5% below the previous 12 month period, reflecting a degree of slowdown but still well above the post financial crisis average.

At the same time mortgage approvals have remained stable over the past 12 months, in spite of falling demand for finance from buy-to-let investors, put off by the removal of mortgage interest rate relief.

Private sector housing completions increased by 14.2% in 2017 but remain well below pre-financial crisis levels and with overall net additions of 217,00 still well short of the 250,000 additional homes the government believe are required each year to meet demand.

UK house prices were 8.2 times average individual earnings in February, albeit with significant regional variation. This represents a 2.5% decrease over the past 12 months as house prices have grown at a lower rate than wages, suggesting housing has become slightly more affordable in the past 12 months. The peak level reached in 2007 prior to the financial crisis (August 2007) was 8.6x.

In spite of high house prices, overall affordability among existing home owners is strong given the extremely low cost of servicing mortgages, with average interest rates on a 5-year fixed deal at 75% LTV currently a shade over 2%, compared to above 6% in 2008. The average cost of mortgage interest was 8% of average earnings in Q4 2018, which far lower than historical norms.

Bank of England data shows half of UK homes are currently mortgaged (13.5m / 27m) with a total mortgage value of £1.4 trillion, representing 20% of the total housing stock value of approximately £7 trillion, at an average LTV among those mortgaged properties of under 47%.

Low levels of debt and low costs of servicing debt mean overall affordability among home owners is strong, providing a significant buffer against potential future interest rate rises. BOE guidance indicates interest rates are set to remain low by historical standards.

Property Partner investor sentiment

In April 2019 we carried out a survey of our investors to find out what they think about the health of the UK property market and how they are going to invest over the next six months. Take a look at what they said here.

Data Sources

  • UK house price index, Land registry, ONS
  • Private rental index, ONS
  • Average rental levels, ONS
  • UK residential property transactions, HMRC
  • Mortgage approvals, Bank of England
  • Housing completions, National statistics (Gov.uk)
  • Average wages, ONS
  • Average mortgage interest rate; Bank of England

Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Past performance is not a reliable indicator of future performance. Forecasts, if stated, are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. 5 yearly exit protection, exit on platform, exit in line with a specific investment case or fund strategy, subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See Key Risks for further information.

The post UK Residential Property Market Index: February 2019 appeared first on Property Partner Blog | Latest News.

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In December 2018 we hit an exciting milestone: our property team sold one of our investment properties on the open market for the very first time, achieving an impressive 43% total return for investors. Here, we explain how we did it.

The opportunity

In June 2018, we identified a number of properties on our platform that represented a great opportunity to sell and realise a significant capital return for our investors in advance of their respective five year anniversaries.

We alerted shareholders in each of the properties, providing them with a detailed case outlining why we believed it was the right time to sell. They overwhelmingly agreed by way of a vote to proceed with the sales.

The first sale

Flat 6, Oldham House, Ilford was the first property we sold on the open market. It was purchased in March 2015 for £165,000 owing to its compelling investment case, underpinned by its central location, proximity to local transport links and the fact that a Crossrail station was due to open in Ilford in 2018. Crossrail was predicted to be a game changer for the local property markets, placing upwards pressure on capital values and rent.

An assessment of the property’s open market value in March 2018 indicated that Crossrail had indeed delivered the anticipated boost to the local market, as the property’s value had increased by 42% relative to the initial purchase price in 2015. In June 2018, 88.7% of investors in Oldham House who participated in the shareholder vote, voted to sell, and our property team began the sales process.

In December 2018, Flat 6, Oldham House, Ilford was sold for £235,000 – £10,000 more than the anticipated sale price as valued by an independent RICS surveyor. Prior to sale, Oldham House was trading on the Resale Market at a 13% discount to the latest valuation.

The returns

Investments made in the property when it was brought to the platform in early 2015 achieved a 43% total return (capital gain, plus dividend income) after fees and costs.

We are very pleased to have achieved these returns for our investors as a result of the sale of Flat 6, Oldham House on the open market – the first time an asset has progressed through acquisition, management and sale on the Property Partner platform.

There are similar properties to Oldham House, Ilford that are currently trading at a discount to valuation on our unique Resale Market. Is now the right time to buy them?

Past performance is not a reliable indicator of future performance.

Further sales

We have since sold a further two properties on the open market, returning 27% and 31% total return respectively.

You can read more about all three properties on their ‘property detail’ page linked below.

Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Past performance is not a reliable indicator of future performance. Forecasts, if stated, are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. 5 yearly exit protection, exit on platform, exit in line with a specific investment case or fund strategy, subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See Key Risks for further information.

The post How we achieved a 43% total return for investors appeared first on Property Partner Blog | Latest News.

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Welcome to our Open House series. Every quarter we open the doors on our data to share information about our community, investment performance and measures of liquidity in the Resale Market. The series is born of our commitment to data transparency, and we hope you find it useful.

Our Investors

The figures above are correct as of 31 March, 2019. Figures in green represent a net change in the displayed figures from the previous quarter ending 31 December 2018.

The chart above highlights how investment through the platform has grown since its inception in January 2015.

Our Properties

The figures above are correct as of 31 March, 2019.

Rental Income and Property Valuations

We pay rental income on the 5th of each month, on properties that have fully funded, completed and are trading on our secondary market. In some cases, we have managed to secure higher rent than originally forecast when the properties were listed on the platform.

All our properties are independently valued by a RICS qualified Chartered Surveyor at purchase, and then periodically thereafter. Residential properties are revalued every six months on 31 March and 30 September, and Purpose-Built Student Accommodation and commercial properties are revalued yearly on 30 September. All revaluations go live on the platform on the 5th of the following month. To learn more about the latest quarterly valuation and performance on platform, click here.

The surveyor’s valuation feeds into the Latest Share Valuation for each property, along with mortgage debt, amortised purchase costs and any deferred tax applicable to capital gains. You can download an Excel tracker of the historic share price movements below. The Excel tracker is updated bi-annually after each revaluation and will allow you to track the performance of each individual property.Download Historic Valuations and Dividends by Property

The Resale Market

Investors can realise a capital return by selling shares on the Resale Market at any time, by placing an offer to sell at their chosen price or matching an existing bid order. Alternatively, investors can exit at market value five years after a property’s launch on platform. (Read more about 5-yearly mechanics here). Investors looking to purchase shares on the Resale Market can match a sell offer or place bids at their chosen price. Learn more about how the Resale Market works, here.

The figures above are correct as of 31 March, 2019. Past performance is not a reliable indicator of future performance.

We have also prepared a full download of Resale trading activity, including all transactions matched through bids. This spreadsheet allows you to review trading by property, including the trade date, trade price, premium to Initial Valuation, and premium to Latest Share Valuation.Download Resale Market data

We will continue to share information and data, to give investors a clear view on our performance. For those of you who are not yet investors, we hope that this data will help you make an informed decision as to whether to invest in properties through our platform.

If you would like to provide any comments on this article, or offer your time for a call to provide general feedback, please call us on +44 (0)20 3696 5600 or drop us an email on support@propertypartner.co

We’d love to speak with you.

1. ‘Capital returned to investors’ denotes the total value of shares sold on the Resale Market.
2. ‘Units Funded’ refers to the number of individual flats or houses that have been funded to date.
3. ‘Investments Funded’ refers to the total number of properties that have fully funded on the platform.
4. ‘Matched by bids’ refers to the total value of shares sold, resulting from bid orders being matched.
5. ‘Portfolio traded on Resale Market’ is the total value of shares sold on the Resale Market as a percentage of the total value of New Listing investment.
6. ‘Time to sell’ denotes the weighted average time it has taken to sell shares at or below the 30-day weighted average share price.

Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Past performance is not a reliable indicator of future performance. Forecasts, if stated, are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. 5 yearly exit protection, exit on platform, exit in line with a specific investment case or fund strategy, subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See Key Risks for further information.

The post Open House: March 2019 appeared first on Property Partner Blog | Latest News.

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In October 2018, we asked our investors about how they planned to invest over the next six months. The timing was intentional. At that point the UK was scheduled to leave the EU in six months time (29 March 2019), and we thought it would be good to know where our investors stood.

Fast forward six months and…we are still in the EU, for better or worse, we don’t take sides (at least not professionally!). We asked our investors the same question and below are the results.

81% of Property Partner investors who responded are planning to maintain or increase the amount they invest in the next six months. This has increased from 74% when asked the same question in October last year. The number planning to decrease the amount they invest in the next six months has almost halved to 6%.

Brexit and uncertainty in the UK property market continues to be cited as a major reason amongst investors unsure how they will invest and those planning to decrease their investment in the next six months.

But despite Brexit, it is worth noting that normal life carries on and that of the 19% of investors who are unsure or looking to decrease their investment levels, personal circumstances were the most mentioned reason. 39% cited such personal reasons ranging from having new babies, moving home, increased cost of living or simply wanting to use their cash for something other than investing.

The data shown was collected over two surveys, the first conducted in October 2018, with 450 responses. The second was conducted in April 2019 with 481 responses.

The UK property market

Want to know what’s really happening in the UK property market? Tap below to read why we think it’s a lot more stable than you might think.

Since launch, over 13,000 people have invested in property through Property Partner.  The platform now manages over 1,000 tenanted units valued at over £135m.

Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Past performance is not a reliable indicator of future performance. Forecasts, if stated, are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. 5 yearly exit protection, exit on platform, exit in line with a specific investment case or fund strategy, subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See Key Risks for further information.

The post How much do you intend to invest in the next six months? appeared first on Property Partner Blog | Latest News.

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“Housing market outlook worst for 20 years, say surveyors” BBC News, 17 January 2019

“Negative housing demand for eights successive month says RICS” Property Reporter, 11 April 2019

“Brexit a major drag on UK housing market, says surveyors” The Independent, 11 April 2019

“House price forecasts heavily downgraded as Brexit freezes market ” The Telegraph, 23 April 2019

You could be excused if you find yourself downbeat about investing in the British housing market. Of course, headline property value changes are quick wins for the press, and provide exposure for the sources; whether you are an investor, a homeowner or looking to get on the housing ladder, house prices are important in understanding your financial capacity.

The perceived sentiment in the market is further compounded by the political and economic backdrop. Brexit, the global economic ‘slowdown’, trade deals between the USA and China, the future makeup of the British government all can have an impact, to various extents.

However, a closer look at the facts provides a different picture. Amidst press speculation,  opinions of those with a vested interest and Brexit mania, there is clarity that the UK housing market is trotting along just fine.

As you read on please remember, your capital is at risk when you invest and past performance is not a reliable indicator of future performance.

Why should we question the headlines?

Some commentators on the UK property market have a habit of writing sensational headlines to sell papers or clicks. In the world of media, bad news is good news, and good news is…dull news. We as investors need to read between the lines.

Let’s take a look at the source behind the above headlines. Perhaps the most trusted body in the property industry, the Royal Institution of Chartered Surveyors (RICS), provides a monthly sentiment survey (the UK Residential Market Survey), used by the Government and the Bank of England among others, and journalists. The survey takes into account the views of over 300 Chartered Surveyors in the residential sales and lettings markets.

Understanding the methodology is important. The survey is both qualitative and quantitative, taking into account statistics (e.g. average price change over a three month period) and the estate agents’ opinions (e.g. ‘how do you expect sales to change over the next three months?’). Worth considering is that it does not include responses from online estate agents, such as Purple Bricks, estimated to represent about 7% of the market.

At Property Partner we respect the work done in this survey; it is a valuable gauge on sentiment within the industry. But it is only a piece of the puzzle – to understand the full picture of the market, it is important to also consider other indicators, such as house price performance, the number of transactions and mortgage approvals, as well as looking at long term investment data sets (more about these later on).

Has the UK property market frozen?

Behind the refraction of the headlines, long term housing market trends are performing…well, just fine, actually. In fact one could argue the stability of the market is so mundane that it doesn’t deserve much headline news coverage, but the savvy property investor would recognise stability as the best news of all.

The statistics for house prices show a good level of stability in the market. Nationwide suggests house price growth has been 18.2% over five years, 41.2% over 10 years and 309.0% over 25 years. Land Registry data, which uses a different methodology, is roughly the same – in fact, their measurement of average property price is slightly more optimistic, registering 26.4% growth over five years, 45.6% over 10 years and 314.2% over 25 years.

Whilst headline rates about London and the South East are likely correct in that they are flat or in some cases declining, we have also seen significant price growth in these areas over the last decade, perhaps indicating a current price correction as well as a response to stamp duty and buy to let tax changes.

Data from LSL Property Services, would suggest that the national picture is being distorted by London and the South East, with solid house price growth over the past year in areas such as the West Midlands (1.9% growth), North West (1.5%) and Yorkshire & Humberside (1.2%) offset by falls in London (down 1.1%) and the South East (down 1.9%) – and of course, this is just based on one year’s performance. Indeed, pockets of London are demonstrating strong annual growth, such as Southwark (24.5% growth), Richmond upon Thames (7.1%) and Ealing (6.5%). It’s worth noting that the number of transactions in January and February tend to always be lower than other times of year, so outliers may have more influence on the rolling 12 month averages reported. The point is that there is growth out there and like any complex market, there will be winners and losers.

Much of the property focus in the press is on Prime Central London (PCL) properties. Compared to the rest of the British property market, PCL only makes up a fraction of the housing market and is of little use as a bellwether for the national market. The number of transactions within PCL are insignificant, only 66 per week out of ~23,000 per week nationwide.

According to HMRC’s latest UK Property Transactions Statistics, seasonally adjusted property transactions above £40,000 are remarkably stable. Over both a five and 10 year period, the stability of the housing market remains impressive, as the below graph indicates.

Source: HMRC UK property transactions statistics

The Financial Conduct Authority (FCA) provides further evidence for this trend, with total value of all mortgages in Q4 2018 in the UK increasing at a moderate rate over one, five and 10 year periods. In fact, the total value of all mortgages in the UK increased by 3.1% over one year, 16.4% over five years and 20.1% over 10 years.

Despite the greater restrictions on lending by banks in the wake of the financial crisis, evidence suggests buyers are happy to continue buying houses and banks remain willing to lend. Of course, this data set doesn’t include cash purchases.

Supply & Demand

Many would argue that the housing market remains dominated by the simple economic model of supply and demand. England is still failing to build enough homes to meet demand in several regions across the country, with a Parliament briefing paper published recently estimating the housing supply needed to meet demand at 240,000 to 340,000 per year. As unhelpful such a wide range is, only 222,000 new homes were completed in 2018, well below what is required and that is not an outlier.

Despite expectations that Brexit would impact migration flow, net migration remains positive at over 280,000 in 2018, with the UK population forecast to grow by 5.5% between 2016 and 2026, and England 5.9%. Other demographic fundamentals, such as record low unemployment, wages both steadily growing and consistently outstripping inflation and an ageing population all point towards a market where more housing will be needed.

Rental Income

Rents continue to grow broadly in line with inflation, rising by 1.2% in the year to March 2019 according to the ONS, with inflation currently 1.8% over the same period. The below graph shows all data since January 2011 (noting inflation measures the UK, with rents measuring London, England and Great Britain), using ONS data. The chart demonstrates that rents have been more consistent than inflation over the past seven years, and for the majority of 2015 and 2016 consistently outperformed inflation.

Source: ONS Index of Private Housing Rental Prices

With cities such as Manchester, Liverpool and Leeds attracting increasing levels of Build to Rent development, and Goldman Sachs having recently entered the market by providing a £118 million debt facility to a development in Birmingham, one could conclude that the market has significant potential for growth outside of London. We will be looking at rental income in more detail in future articles.

A stable market

Investment is not meant to be like The Wolf of Wall Street; a sustainable rate of growth through rental returns and capital value rises over the long term are hallmarks of successful property investment. The UK remains home to world leading companies, leading global academic institutions, a world class healthcare system, mature economy, and a respected political system (albeit one that is going through a bit of a tough time right now!).

Property investment needn’t be complicated. Behind every alarming statistic and headline is the ongoing story of a stable real estate market which provides solid returns. With technology changing the way investors can approach any asset class, an industry, which has often lagged behind in its accessibility and propensity for transformation is being reborn – and with clear, unbiased information real estate can remain at the heart of a solid investment portfolio.

To finish off, we thought we’d write some alternative, albeit less attention grabbing headlines – and all are wholly accurate according to the March RICS survey:

“Estate agents are getting MORE efficient and selling MORE of the properties on their books”

“Estate agents in London and South see INCREASE in number of listed properties per branch”

“Estate agents are selling MORE properties in London than a year ago”

Since launch, over 13,000 people have invested in property through Property Partner.  The platform now manages over 1,000 tenanted units valued at over £135m.

Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Past performance is not a reliable indicator of future performance. Forecasts, if stated, are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. 5 yearly exit protection, exit on platform, exit in line with a specific investment case or fund strategy, subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See Key Risks for further information.

The post What’s really happening in the UK property market? appeared first on Property Partner Blog | Latest News.

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It has been a full week since we reopened the Resale Market after our scheduled close period (you can read the updates we released here), and what a week it has been! We have seen some of our busiest days trading ever and we wanted to update you on where the action has been.

Please note: all data is correct as at 11am 17 April 2019

Resale Market activity by region

To calculate the Change in value of shares percentages shown above, we compared the 30 day weighted average share price at the point the market closed with the weighted average share price since the market reopened (10-17 April). This is a comparison of each region before and after the close period during which a significant amount of price sensitive information was released, including revaluations and dividend adjustments.

It is interesting that London has remained stable in spite of the sentiment in the wider London market. The 39 properties on our platform in London have traded on average £1,794 since the market reopened, although Woodgate Court and Flats 1, 5-7 Tower Mint have had the lion’s share with over £10,000 traded each.

The Picture Works in Nottingham is the main reason for a 1.47% drop in the East Midlands. Without this property the change in the region’s value of shares has actually increased by 0.39%.

PBSA leads the way in terms of volume traded since the market reopened with an impressive £90k worth of shares changing hands in seven days. On average, PBSA properties continued to trade at a premium to their latest valuations continuing a long term pricing trend. East of England comes in last, with only £4,134 traded since April 10 with Vista Towers in Stevenage the main drag on this region’s change in share price.

Top 10 traded properties

Here are the 10 properties that have been traded the most since the Resale Market reopened at 11am on 10 April 2019.

PropertyChange in share priceVolume traded Latest valuation changeDividend yield adjustment
Viaduct Works, Huddersfield-0.02%
£40,722
Golden Hill Fort, Isle of Wight4.97%£32,914+0.19%
Heritage Court, Dinnington7.38%£24,521
Birley Moor Heights, Sheffield2.03%£21,292
Marco Island, Nottingham7.08%£16,558+0.65%+0.75%
Stokes Mill, Stalybridge5.76%£13,128
Ty Glyn, Bangor1.37%£11,192
Flat 9, Woodgate Court, Hornchurch1.59%£11,157+1.72%
Barton Court, Warrington1.82%£10,968
Friars Way & Abbotsmeade Close, Newcastle6.27%£10,952+1.09%

Data in italics relates to changes in dividends yield and latest valuations released during the April close period.

Information correct as at correct as at 11am 17 April 2019

Biggest increases in share price

Here are the 10 properties that have seen the biggest increase in share price since the Resale Market reopened at 11am on 10 April 2019.

PropertyChange in share priceVolume traded Latest valuation changeDividend yield adjustment
George Road, Halesowen9.79%
£8,362+5.57%
Norman House, Derby7.83%£4,002+1.82%
Heritage Court, Dinnington7.38%£24,521
Station Road, Redhill7.30%£1,282
Whitewell Road, Frome7.11%£6,962+4.21%
Marco Island, Nottingham7.08%£16,558+0.65%+0.75%
5 Scholars Way, Romford6.83%£1,268+0.50%
Friars Way & Abbotsmeade Close, Newcastle6.27%£10,952+1.09%
Prospect Court, Market Drayton6.03%£6,627
Stokes Mill, Stalybridge5.76%£13,128

Data in italics relates to changes in dividends yield and latest valuations released during the April close period.

Information correct as at correct as at 11am 17 April 2019

Biggest decreases in share price

Here are the 10 properties that have had the biggest decrease in share price since the Resale Market reopened at 11am on 10 April 2019.

PropertyChange in share priceVolume traded Latest valuation changeDividend yield adjustment
Premier House, Edgware-36.29%
£1,164-24.62%
The Picture Works, Nottingham-25.91%£4,199-15.25%
Vista Towers, Stevenage-5.42%£603-1.00%
Spencer Parade, Northampton-4.62%£1,246+1.29%
-1.25%
Chadwick Road, Langley-4.07%£1,875
Riverside House, Bourne End-3.63%£884-4.07%
Stafford Vere Court, Woodhall Spa-3.32%£7,158-1.00%
Stackyard Farm, Staxton-3.19%£2,759-0.10%-1.00%
Flat 22 Rubicon Court, Romford-2.71%£1,187
St Catherines Mews, Lincoln-2.67%£6,534-0.75%

Data in italics relates to changes in dividends yield and latest valuations released during the April close period.

Information correct as at correct as at 11am 17 April 2019

Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Past performance is not a reliable indicator of future performance. Forecasts, if stated, are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. 5 yearly exit protection, exit on platform, exit in line with a specific investment case or fund strategy, subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See Key Risks for further information.

The post The Resale Market – activity update appeared first on Property Partner Blog | Latest News.

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Dear Client, It’s the close period

At Property Partner we work hard to be clear, comprehensive and transparent with our information disclosure.  We want to help our clients make good investment decisions and understand the key risks. Our Resale Market now has £135m of property being actively traded, and we must ensure that we treat all clients fairly with regard to information disclosure.

Consequently, every three months we close our Resale Market for three working days to allow for any disclosures, updates and the orderly announcement of information that could be price sensitive. Today at 11am the Resale Market closed and will re-open for trading at 11am Wednesday 10 April.

We are releasing a substantial set of announcements relating to our properties which you can find links to in this blog.

But before we get to that, I wanted to mention some of the key developments over the past few months.

Total portfolio returns 4.9% over past 12 months

I’m happy to be able to report that our portfolio has performed well over the past year. Total return is 4.9% across the whole portfolio, with the regional properties delivering a total return of 6.8% and London properties delivering 0.8%. Read more here.

Despite the soft residential market, PBSA yields have proved to be resilient

We know many of our clients have a strong appetite for the higher yield PBSA blocks, and in recent months we have reviewed many student blocks in Russell Group university towns and other cities.  We have been conservative in our bidding, searching for high yields, but have found ourselves outbid on several occasions. This shows the PBSA block market values are remaining robust (even increasing) and investors wishing to get into this market will need to accept net dividends starting at 5%.  Resale Market PBSA values on our platform also reflect this reality with average net dividend dropping to 5.93% as the share price moves to a premium vs initial listing.

Opportunistic Fund is partially invested

We raised a £2.1m opportunistic fund in January 2019, with the intention to be a cash buyer for discounted properties available from highly motivated sellers.  We were delighted to pick up a block of 18 student apartments in Coventry for £1.3m, which we believe will deliver the target 10% return or more.  We are working hard to deploy the remainder of the fund, and have a number of deals being negotiated.

Sale of three properties has delivered 33% total return to investors

Back in July 2018 we identified four London properties that we advised investors had achieved the bulk of their expected capital gain due to Crossrail. Investors agreed in a voting process to sell these properties, and I am pleased to report that we have now completed the sale of the third of these properties, Heathlands Way.  

The three properties were sold returning £850,000 to investors at a collective premium of 1% to RICS valuations. This represented a 14% increase over their last trading value on our resale market, and resulted in 33% total return to investors.  The fourth property did not fetch its target sale price, has been relet and returned to the Property Partner Resale Market.

Total development loan investment surpasses £3m

We have continued to source carefully selected mezzanine debt opportunities in partnership with Proseed Capital, with total lending now exceeding £3m. In January we also enabled clients to open an Innovative Finance ISA alongside their general Property Partner account.  This account enables investors to invest up to £20,000 per annum and transfer-in existing ISAs, with any gains shielded from income tax subject to personal circumstances.

Award winning – again!

We’re particularly pleased to be recognised for the second year running as winner of the Best Property Investment Service 2019 in the Online Personal Wealth Awards, and excited that Golden Hill Fort has been shortlisted for Deal of the Year 2019 in the RESI awards.

I would like to thank all our clients for continuing to support us. Please feel free to email me at ceo@propertypartner.co with any thoughts and I’ll endeavour to respond to all messages.

Kind regards,

Marshall King, CEO

Performance Revaluations & total returns

We regularly revalue the properties on our platform using independent RICS chartered surveyors.

Dividend changes

Selective dividend changes, based on a review of the income performance of every property on our platform

Features Featured properties

Read about the properties we think are the hidden gems on our Resale Market.

Resale Market rebates

Read about the incentives we offer for trading large volumes on our Resale Market

Improved portfolio tracking

We recently improved the way you can track your portfolios performance

Portfolio Management

Use the links below to read updates on specific properties and investments:

Regent House, Basildon Development Loan Sherborne House, Cannon Street Heathland’s Way asset sale Fire safety Review: Premier House and The Picture Works Opportunistic Fund update

As always, our team is here to help you. If you have any questions regarding any of the updates please do get in touch.

Please note: when you invest your capital is at risk and past performance is not a reliable indicator of future performance.

The post Quarterly Close Period – April 2019 appeared first on Property Partner Blog | Latest News.

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• Latest revaluations imply a total return of 7.2% p.a. since launch • Total return over the past 12 months is 4.9% across the portfolio • Assets under management increased by £12.3m in the six months to 31 March, reaching £135m

The UK property market has continued to demonstrate resilience and stability, with residential prices increasing by 2.6% over a 12 month period according to the Land Registry UK house price index. Overall transaction levels remain in line with recent years at a national level. Markets have continued to diverge regionally since the EU referendum, with prices now weakening in some areas of London and transaction levels dropping materially.

For the past three years, we have focused our investments on higher yielding areas outside of London and have bought higher yielding asset classes to the platform, such as Purpose Built Student Accommodation and development loan bonds. In Q1 2019, we launched our first opportunistic fund, raising £2.1m to acquire discounted properties from motivated sellers with a target net total return of at least 10% p.a.

Latest revaluations imply a total return of 7.2% p.a. across the platform since launch

Every six months, Allsop LLP, an independent, RICS accredited surveyor, re-values the residential properties on the Property Partner platform. Of the 95 properties that were revalued at 31 March 2019, 17 saw an increase compared to their September 2018 level, 65 remained unchanged and 13 experienced declines. Of the 30 properties that experienced an increase or a decrease, only five had meaningful changes. You can read more about the reasons for these changes on the individual property pages.

The result was an aggregate decrease of 0.17% in the underlying value of properties in the portfolio over the past six months. This includes the impact of valuation adjustments made to Premier House, Edgware and Picture Works, Nottingham, both of which have been affected by cladding which was deemed unsafe in the aftermath of the Grenfell Tower tragedy. The remainder of the portfolio increased in value by 0.2% in the past 6 months and since purchase, properties in the portfolio have increased in value by 4.7%.

You can view the comparable information provided by Allsop for each of our residential property valuations here.

The revaluations have produced an average total return of 7.2% p.a. across all properties since platform launch. This is made up of 2.8% from capital growth and 4.3% from dividend yield, denoted by the blue bars in the chart below.

The above total return* calculation can be found here (not available on mobile).

Taking into account the full discounts achieved at purchase and each property’s current valuation at the intended method of sale, the total return increases to 12.3% (denoted by the green bars in the chart above).

The total return over the past 12 months is 4.9%

The bars below show that the portfolio has, on average, after all fees, delivered an annual total return of 4.9% over the 12 months to 31 March 2019, including a dividend yield of 3.9% and 0.9% in capital value growth.

The graph below denotes the regional return profile based on 12 month performance at the end of each period, corresponding with the total return of 4.9% across the platform at 31 March 2019. UK regions outperformed the capital in the last 12 months, with an income return of 4.5% compared to 2.6%, capital growth of 2.2% versus -1.8% and a total return of 6.7% against 2.6%.

Average dividend yield of new listing properties funded in the 12 months to 31 March 2019 is 5.3%

High-yielding PBSA blocks have driven a higher average dividend yield across new properties listed on the platform. Over the last 12 months, the new properties we’ve funded have had an average dividend yield of 5.3%, compared to 4.0% across all properties since platform launch.

Assets under management increased by £12.3m in the six months to 31 March, reaching £135m

The total value of investments on the platform is £135 million with 114 separate assets for investors to select from. Assets under management have increased by 99% in the last 2 years and are nearly three times greater than at the time of the EU referendum in June 2016.

Four property development loans funded, paying interest of between 9% p.a. and 12% p.a.

In addition to sourcing properties with higher income yields, we continued to list property-backed debt investments on our platform, providing investors with the opportunity for further choice and diversification across higher yielding investments. In January 2019, we also launched our Innovative Finance ISA to enable tax free investment into these opportunities. We intend to continue to expand this part of the business in addition to our core property investment offerings, with additional property-backed debt investments scheduled for launch on platform in the coming months.

We are passionate about transparency and hope this information is helpful as you consider your investment decisions. You may also like to read our Open House series where we share further information about our community, investment performance and measures of activity on our Resale market each quarter. The March update is coming soon. Click here to read the latest Open House update.

Please note: when you invest your capital is at risk and past performance is not a reliable indicator of future performance.

If you have any questions or comments on this article, or anything else, please call us on +44 (0)20 3696 5600 or drop us an email on support@propertypartner.co – we’d love to hear from you.

*Since the launch of the platform in January 2015, properties have, after fees and corporate taxation, delivered an estimated total return of 7.2% p.a. up to 31 March 2019 ; including 4.3% net rental income (dividends) and 2.8% capital value growth. These returns are calculated six monthly and (i) with reference to the average dividend yields and price movements of properties with at least 3 months trading history on the Resale Market, (ii) spreading over 5 years any purchase discount to the RICS valuation, (iii) amortising property acquisition costs over 10 years, (iv) assuming the property remains tenanted, (v) assuming that investments are held for the long term, to the extent that the annualised impact of the Property Partner initial transaction fee becomes immaterial, and (vi) weighting each property’s performance according to their initial funding value. You can download the objective data used to calculate this estimated return here (not available on mobile). Past performance is not a reliable indicator of future performance.

To go back to the quarterly close period update click here.

Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Past performance is not a reliable indicator of future performance. Forecasts, if stated, are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. 5 yearly exit protection, exit on platform or exit in line with Opportunistic Fund strategy, subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See Key Risks for further information.

The post REVALUATION: PROPERTY PERFORMANCE UPDATE AT 31 MARCH 2019 appeared first on Property Partner Blog | Latest News.

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We regularly review the income performance of every property on our platform to ensure that the dividends paid to investors are aligned with the net rental profits generated by the investment. Maintaining a strong balance sheet with adequate provisions for potential future costs, enables us to safeguard investors’ interests and maximise long term performance.

As a result of the latest review, we have identified 19 properties where the dividend payment has not remained consistent with the net rental income. The dividend will be adjusted accordingly to reflect the current performance of the property.

From 5 May 2019, five will pay a higher dividend and 14 properties will pay a lower dividend. The remaining 88 properties currently paying dividends will remain unchanged.

For each property where there has been a change, we have provided a detailed explanation of the reasons for the change at the top of the “Investment Case” section for that property.

Please note that the dividends listed here are based on the Latest Valuation of each property, based on independent surveyors valuation at 31 March 2019, which you can see in each property’s “Financials” section.

The overall impact across the portfolio is that the weighted average dividend yield has decreased from 4.20% to 4.07%.

The changes in dividends for the five properties that will pay a higher dividend are as follows:

Property addressCurrent dividendChange (%)New dividend
5 Scholars Way, Romford2.64%0.50%3.14%
80 Manordene Rd,
Thamesmead
2.92%0.25%3.17%
Marco Island, Nottingham4.02%0.75%4.77%
Cotton Avenue, Acton2.67%0.25%2.92%
22 Amhurst Walk,
Thamesmead
2.66%0.50%3.16%

The changes in dividends for the 14 properties that will pay a lower dividend are as follows:

Property addressCurrent dividendChange (%)New dividend
Spencer Parade, Northampton4.63%(1.25%)3.38%
Tower Mint Flats 1,5,6,72.23%(1.00%)1.23%
Flat 2, Tower Mint2.74%(0.75%)1.99%
Flat 4, Tower Mint2.74%(0.75%)1.99%
Flat 3, Tower Mint2.74%(0.75%)1.99%
Molyneux Court, Liverpool4.45%(1.00%)3.45%
St. Catherines Mews, Lincoln4.74%(0.75%)3.99%
Carlisle Mews, Gainsborough4.84%(1.25%)3.59%
Thornwood, Eastbourne2.83%(1.00%)1.83%
Stackyard Farm, Scarborough3.73%(1.00%)2.73%
Vista Towers, Stevenage4.83%(1.00%)3.83%
Woodside Rd, Tonbridge2.38%(1.00%)1.38%
Bridgewater St, Manchester3.43%(0.75%)2.68%
Stafford Vere, Lincolnshire3.35%(1.00%)2.35%
Why are the dividend yields changing?

As a large scale, professional asset manager, Property Partner aims to deliver strong income returns for investors from the properties on our platform. We treat our tenants fairly, and manage properties to minimise voids and reduce longer term repair and refurbishment costs. This enables us to maximise rental profit and the resulting dividend we are able to pay investors over time.

Each of our investment properties is held within a Special Purpose Vehicle (SPV), which is a UK limited company. The costs of managing the property and servicing the mortgage are covered by the rental income it generates, and the profit is paid out to shareholders in the form of a monthly dividend.

Both rental income and operating costs fluctuate over time due to a multitude of factors, and the profits will change accordingly. For example, higher than expected levels of vacancy would reduce rental profit, while increased demand from tenants in a local area could facilitate greater than expected rental increases.

To go back to the quarterly close period update click here.

Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Past performance is not a reliable indicator of future performance. Forecasts, if stated, are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. 5 yearly exit protection, exit on platform or exit in line with Opportunistic Fund strategy, subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See Key Risks for further information.

The post Dividend adjustments: April 2019 appeared first on Property Partner Blog | Latest News.

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Property Partner Blog by Adit Ruparel - 1M ago

We have selected four properties on our platform which we believe offer compelling investment cases for the coming year. Read more about each opportunity below, and click through to view each property’s investment case.

Correct as of 5 April 2019

Woodgate Court, Hornchurch

Brought to the platform in May 2015, Woodgate Court, Hornchurch was offered for sale in early September 2018, in an attempt to crystallise the capital gain since purchase. Unfortunately, at the time the local market conditions and broader economic uncertainty meant that it was unlikely that we would achieve a sale price in line with expectations. The property was therefore re-tenanted until the summer of 2019, when we will again review the opportunity to sell.

We believe this property offers the opportunity for substantial capital return on investment. The property has been trading at 24.94p over the last 90 days, this is a 16% discount to the independent valuation of £290k. Allsops, confirmed this valuation based on three properties of similar stature sold in the building for greater values since mid 2018. See evidence from Allsops here.

George Road, Halesowen

Having been revalued upward by 7.2% at 31 March 2019, George Road, located in the West Midlands, has been trading at 69.85p per share over the last 90 days. Given our strategy to sell the units individually, the break up valuation is 87.24p (see evidence from Allsops here). Should we be able to achieve the full break up value, the current trading price represents a 24.9% discount to the sale price.

1, 5-7 Tower Mint Apartments

On 5 April 2019, Tower Mint’s dividend was adjusted downward due to a change in the letting circumstances. This has not had an effect on the underlying capital value, as confirmed by the recent independent revaluation of the property staying constant.

Bought in November 2015, Tower Mint, located in the heart of London, has been trading at 115.14p per share over the last 90 days. Given our strategy to sell the units individually, the break up valuation is 138.98p (see evidence from Allsops here). Should we be able to achieve the full break up value, the current trading price represents a 20.7% discount on the sale price.

Whitewell Road, Frome

In January 2019, the annual dividend for Whitewell Road, Frome was marginally increased due to efficiencies made via property management. Since then, the trading price has been 48.42p per share over the last 90 days. The recent revaluation (announced 5 April 2019) has increased by 6.2%. Given our strategy to sell the units individually, the break up valuation is 60.50p (see evidence from Allsops here). Should we be able to achieve the full break up value of the four houses, the current trading price represents a 24.9% discount to the sale price.

To go back to the quarterly close period update click here.

Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Past performance is not a reliable indicator of future performance. Forecasts, if stated, are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. 5 yearly exit protection, exit on platform or exit in line with Opportunistic Fund strategy, subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See Key Risks for further information.

The post Featured properties appeared first on Property Partner Blog | Latest News.

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