Is it any surprise that housing
shortages have opened an interesting window of opportunity?
Statistics establish that PRS
(Public Rented Sector) accounts for 16.5 percent of all households. In
addition, bank deposits are at an all-time low, making money by holding the
deposit near impossible. Not only is this, but an even more disturbing trend is
the low exchange rate of pound sterling against other currencies, making
international investments less appealing.
The changes in the Housing Bill in
2017 make it even easier to take brownfield sites and provide group or
individual investments. These investments can take on several different
formulas, depending on the investors and land development needs. Planning
applications are easier to process than ever before.
Now the question is “how to take
advantage of planning”?
The current conditions have developed
into a local opportunity the likes of which have never been seen before. There
is growing interest among institutional investors, making the residential
market, which is usually made up of individual investors with smaller
portfolios substantially more viable.
Properties outside of London are now
attractive to pension fund families and foreign wealth funds, as they have a
better chance to provide brownfield site planning and development
opportunities. Local councils have been set targets that require new housing
development planning. This creates a current environment of planning
application acceptance.
The current trends allow a wider
range of profitable planning whereby making local councils happier to
accommodate well-funded planning and development that meet their set target
goals. Due diligence and inspections are conducted by specialists to ensure
that planning applications meet council set target goals.
Properties that meet rigorous
scrutiny are then purchased by a special purpose vehicle and a UK limited
company is set up. This UK limited company will hold and own the property while
planning application and development proceeds. Shares in this company are then
allocated to each investor based on agreed terms. Specialists conduct and
provide for the planning application process, in line with current target
goals.
Once planning has been granted, the
property is marketed for sale, often developers purchase is agreed upon
beforehand (subject to planning approval and permit acquisition). Once a buyer
is found land assists are transferred and investors are paid the profits. This
type of investment formula is low risk to the individual, as well as the
institutional investor.
Population growth and rising
property values create a win-win scenario. The formation of the UK Limited
Company provides the personal protection many investors have been asking for.
The end profits are then manageable within personal financial planning.