Author Archives: freshmove

A rental “revolution” is starting to take place in the UK

Institutional investors are set to revolutionise the private rental sector with approximately £30bn of institutional investment specifically earmarked for the building of new homes for rent in the UK. This is unprecedented where the UK has held a traditional tendency towards owning rather than renting property. The increase in (and Government encouragement) of institutional investment is set to shake-up the rental sector potentially changing the landscape for landlords for many years to come.

Since 2012 private rental has been the second largest housing tenure in England behind owner occupation, and is now overtaking social housing. The market is no longer being classed as the “private” rental sector but as a “professional” rental sector, where bigger landlords are creating bigger schemes and driving supply.

In the context of the national shortage of housing stock, the Government has increasingly looked to the private rented sector (PRS) to play a greater role in providing more new build housing. In 2013 the Government put in place the £1 billion Build-to-Rent fund, to build 10,000 homes specifically for private rent, as well as introducing The Affordable Housing Guarantee Scheme which has already committed to guarantee over £1.5 billion of debt for more than 13,000 new affordable homes, across 41 borrowers.

Build-to-Rent is defined by the government as ‘a fully recoverable investment where the government shares risk or bridges finance to help schemes to build, managed and let’. This allows developers to shift some of their risk onto the government, which in turn enables them to take on additional projects. A study by EC Harris reached the conclusion that the build-to-rent scheme “could have much wider potential across the UK than previously thought”. He went on to say that, “Indeed, the scheme could partially resolve the current housing crisis”

Who are typically institutional investors

  • Public & Private Pension Funds
  • Sovereign Wealth Funds
  • Insurance Companies
  • Government Agencies
  • Endowments, Foundations

During the first six months of 2015 appetite for residential investment among institutional investors has never been higher, and large numbers are looking to trade out of other sectors to fund deals:

  • Urban regeneration specialist Sigma Capital is the latest firm to announce it is entering the Build-to-Rent sector, seeking to construct and manage its own private rental properties. The company has raised £20m through a placing of shares and says it wants to “build its own substantial portfolio of PRS assets”. With the borrowing that the £20m will facilitate, Sigma expects to deliver approximately £50m of gross development cost in the first 18 to 24 months through building family homes across up to eight sites, with early schemes in the Greater Manchester and Liverpool areas
  • In April, Estuary Housing Association, a provider of social housing in Essex, will be building 400 new homes by 2018, after borrowing £40 million from the international investment manager M&G Investments. M&G has now invested over £5bn in UK social housing
  • Aviva Life and Pensions UK Limited sold the former Prittlebrook Industrial Estate in Southend, a cleared site of 26.41 acres, to Bellway Homes Limited for an undisclosed sum. Bellway Homes have been granted planning consent for 231 residential dwellings including affordable housing, a two storey hospice facility, and office space
  • London saw the establishment in 2012 of the UK’s first institutionally backed PRS-only developer, Essential Living, a partnership between Essential Land and M3 Capital. In June 2015, three new Build-to-Rent funded developments were announced in London
  • The Canada Pension Plan Investment Board (CPPIB) in June of this year purchased a £1.1bn portfolio with buildings across 17 of the largest university towns and cities in Britain. University digs are now increasingly viewed as an attractive asset class that can provide robust returns
  • Some of the big spenders in the sector this year have been from overseas. LetterOne Treasury Services, backed by the Russian oligarch Mikhail Fridman, has paid £532m for five central London sites
  • Countrywide plc”, the UK’s largest property services group, announced the launch of ‘Vista’ – a UK residential property fund for institutional investors. In August Vista Fund and Hermes Investment Management entered into an agreement to acquire Baltic Village in Liverpool for over £50 million
  • German developer, Patrizia has entered the UK market with the acquisition of the 20-acre First Street regeneration area in Manchester, where it plans to build a 500-home PRS development. Patrizia said it is also planning to launch a dedicated UK PRS fund. The developer already manages 80,000 PRS apartments in Europe worth €7bn
  • Matrix Homes set up a joint venture between the city council and the Greater Manchester Pension Fund to bring forward a scheme for new build homes for rent
  • In London, Wandsworth Council granted planning permission for a 114 home Build-to-Rent scheme within a 500 home development by Bellway Homes in the Nine Elms regeneration area in Battersea
  • Legal & General made its first direct PRS investment in February. The insurance company, which aims to invest up to £1bn in the sector, bought a £25m regeneration site in east London, two years after first announcing its intention to invest in PRS

Andrew Taylor, the Head of Residential Investment, at Internos stated “the Global investor trend is likely to continue against a backdrop of global market volatility and persistently low bond yields and there is an obvious opportunity for institutional investors looking for liability matching returns that can be found in the UK residential market.

Melanie Leech, chief executive of the British Property Federation, said: “Ultimately, what will help tenants best is more investment in housing. Pension funds and other institutions have billions to invest in this market – developing places that would provide a new generation of high-quality homes that offer greater choice to renters, including the option to sign longer tenancies.”

Property chiefs welcomed the statement made by Brandon Lewis, the Government’s Housing Minister, when addressing around 800 delegates at Celtic Manor in Newport, Wales in August.  He pledged to remove red tape holding back investment into Britain’s growing rental market funded by Institutions:

“Councils should rise to the challenge of devolution” and should seek to “merge third party capital with their land holdings”.

Many developers believe building homes for rent using land or old buildings owned by councils or government departments could provide long-term income for the public sector. Such deals could see councils converting old offices blocks into vital homes for rent without selling off valuable assets.

The Property Magazine International stated after surveying 63 Institutions and Real Estate Investors 62% of those polled is planning to invest in the next 12 months and 69% over the next three years. There is still some way to go before the UK reaches US levels of investment. “For UK pension funds, investment in PRS has moved from being a political necessity to an investment decision. It’s not necessarily coming from house builders, it’s more from contractor-developers and it’s a model structure that can be replicated”.

The questions landlords might want to ask themselves are:

Am I ready for this shake-up in the rental market?

What impact will these institutional investors have on raising the standard of properties available for tenants?

Are there opportunities in relation to working with an institutional investor or becoming a strong regional independent?

Contact the team at Fresh Move Letting Agents Exeter Torquay & Bramhall for more information

Buy to let investors dashing to beat tax rise

More evidence has emerged that buy-to-let investors are dashing to beat tax rises coming their way this April and in the remaining years of this parliament.

According to the latest figures from the Council of Mortgage Lenders, there was a 22 per cent surge in the number of home purchase loans issued to prospective private landlords in January, to 9,500. Moreover the total amount borrowed rocketed 40 per cent to £1.4bn, says The Guardian, reflecting also-increasing purchase prices.

Investment buyers have been flocking to complete their property purchase by the end of this month to avoid the three per cent stamp duty surcharge coming in for second homes at the beginning of April. The policy change was introduced at the Autumn Statement at the end of the November and in the months since, every housing index has noted a huge uptick in buy-to-let activity.

But the stamp duty change is not the only hit coming down the road for landlords. From April 2017, new rules will be phased in that will remove the right to claim tax relief on mortgage interest, which will be replaced with a flat-rate payout that halves the tax break offered to higher-rate taxpayers.

More landlords that nominally pay basic-rate taxes now could fall into a higher tax bracket.

It has been reported that, as a result, there was an increase in the number of people setting up limited companies to house property. The Financial Times quotes Steve Olejnik, the sales director at buy-to-let broker Mortgages for Business, saying the proportion of applications from corporate vehicles has surged from 18 per cent to “well over 50 per cent” in the past six months.

The FT said this was related to the hike in stamp duty as it “applies only to homes bought by individuals”. That is not actually true – the increased levy applies to all second home purchases, even those transacted by a company structure – but it is certainly the case that corporate entities will remain able to offset mortgage interest against their tax bill as a business expense.

Of course, investors need to consider if setting up a company structure would also add costs, for example, through typically higher mortgage rates applicable to businesses buying property. And if you’re thinking of moving an existing portfolio into a new holding company, it would have to “buy” the properties and that could incur a hefty capital gains tax bill.

Contact Fresh Move Letting Agents Bramhall Torquay & Exeter for more information

Location, Location, Location…

Three small words that can transform your property investment decision, says fresh move.
As a new landlord or investor in the buy to let market, what would be your first priority – the type and purchase cost of the property, or the place in which it is situated?

There is no single, definitive answer to this commonly considered question, but in property circles the phrase ‘location, location, location’ is often referred to as the first three rules of property investment.@ fresh move, says: “When looking for the ideal place to invest in or to rent, it is worth remembering the adage ‘you can change the house, but you cannot change its location’.

“To find a property that will appeal to a tenant and provide a good level of rental income and/or capital growth it is extremely important to firstly define that appeal. There are many considerations to take into account and a good place to start is to look for towns, areas or streets that are currently in demand, and are likely to be increasingly popular in the future.

“Location is always a key driver, with proximity to work, schools, commuter routes, shops and public services amongst the many factors to be taken into account when choosing to market a property as a buy to let.

“In today’s market, there is an ever accelerating need for private rented property, with tenant demand often outstripping supply. To be absolutely sure as to whether a property would make a good rental investment it is worth consulting a lettings specialist such as fresh move.

“Expert agents can identify local trends and spotlight properties that are the most popular for the type of tenant looking to rent and the best areas in which to find them.

They will know where property ‘hotspots’ are and which parts of a city or town are driving the market.”

Many buy to let investors choose to stay local in order to ‘keep an eye’ on their investment. It’s a strategy that works for thousands across the country, but there is no reason why a buy to let investment cannot work just as successfully hundreds of miles away – provided you make the right choice of professional lettings agent who can manage, maintain and keep a check on the property on your behalf.

“Within the fresh move network across 3 offices there is a high proportion of landlords who own just one or two buy to let property investments, and many of these are in a different part of the country to where they are based.

“In cases like this an agent will have all the right up to date local knowledge and know properties and locations with the highest tenant demand. They will be able to advise on current, achievable rental levels and help avoid the pitfalls of investing in the wrong areas.”

Fresh move can provide sound advice on helping Landlords to decide the best location for a property investment such as:

• Only decide on where you want to invest after thorough research.

• Do not make a decision based on the look of the property alone. Just because it appeals to you, it will not necessarily be a good rental investment.

• Providing tenants with a quality, well maintained property for them to call home carries responsibilities. Only work with a local agent that you have checked out, trust and who has gained all the relevant professional industry accreditations.

• Remember that big is not always best. A one or two bedroom unfurnished apartment can often yield a better return than larger, four bedroom furnished houses. It’s all down to location and the type of tenant you are targeting.

• Overly high ‘yields’ – or returns on an investment – can sometimes indicate hidden issues and may not necessarily lead to a good investment.

• Beware of “buying cheap and paying dear”. If a property is located in a low quality area it can increasingly become run down – attracting the wrong type of tenant and achieving poor long term capital growth.

“Whilst there are many other things to consider when entering the buy to let market, ‘location, location, location’ must always be uppermost in the mind of a landlord investor,” adds James.

“Sometimes the difference between a good rental property and a not so good one can be down to which side of the street it is on, let alone its geographical location.

“If you want to avoid costly mistakes early on in the process, invest in good local, experienced advice. Initial consultations with fresh move office are free and carry no obligation to proceed.

“At fresh move we can help to source suitable properties and steer people away from opportunities that, at first, may appear good on paper but may not prove to be the best decision over the longer term.”

Video marketing

The way estate agents market their properties has changed. Prospective buyers and tenants are no longer obliged to make regular visits to high street offices, the vast majority of research is now conducted online, with many people only contacting an agent once they have spotted a property that they would like to view.

One of the main questions that people ask themselves when viewing a property – online or in printed format – is whether they can envisage themselves living in that home “It’s all about people imagining themselves living there, deciding whether they can fit their furniture in.” said Miles Shipside at Rightmove.

To give them an idea of what the property actually has to offer, most listings are accompanied by measurements, floorplans and high quality photographs. So far, so good, but video marketing goes much further.

Video content accounted for 64 per cent of global internet traffic last year, this is set to grow to four-fifths of the world’s global internet traffic by 2019, according to Cisco, one of the leading makers of networking equipment.

With most property searches now beginning online, it is “more important now than ever” that estate agents consider adopting video to promote their properties to the widest possible audience “A video allows the viewer to get a much greater sense of its layout and size, which increases the number of viewings form genuinely interested buyers and cuts down on time wasted by the vendor and agent. A property film also often leads to more and better offers.” says James Gardner – Development and Operations Director at fresh move.
Not only do the “buyers love the films” but property videos can also help to generate more instructions, according to James Gardner – vendors also love them! “Many vendors say that it was the film and photography which led them to choose that agent in the first place,” he added.

Think Big

There is compelling evidence suggesting that online video marketing should now be a major element of your marketing budget.

A study of Nielsen for Google found that video is one of the best ways to engage with potential customers. It revealed that websites offering more engagement features, such as video, experienced an increase in conversation rates. This means agents that adopt videos could genuinely expect to receive more viewing enquiries, brochure downloads and completed contact forms.

Still not convinced? Here is a big number that should make you sit up: 1.8 million.

Dr. James McQivery of Forrester Research estimates that 1.8 million words is the value of one minute of video. That is the equivalent of 3,600 typical web pages. If you write an average of one web page an hour, it would take you 150 days of writing to achieve the impact of one minute of video.

Cognitive behaviour

Ask yourself, if this written piece were available as a video would you prefer to watch it or read it?

While reading is active, stimulating interest or thought, George Atkinson Director at Atkinson Brand Reaction, points out that research shows that videos are processed by the brain 60,000 times faster than text. In other words, watching a video is passive, making it much less demanding for the consumer.

“Think about the heavy lifting your cognitive system has to do when reading an article compared to watching a video clip,” he said. “Humans are hardwired to avoid demanding cognitive strain, so this tendency towards laziness will, more often than not, invite us to choose information that is easy to process over the form that makes us put out a lot of effort.”

Clear picture

Walter Di Marino, Head of Communications at, an Italian property portal devoted to overseas home-hunters, said that there is “noting better” than a video to “convey and bring out” all the elements of the property that you wish to convey. Put simply: “homes with videos get much more clicks.”

He added, “A video can prevent potential purchasers from bad surprises in the sense that it offers a whole and faithful picture of the property and of the surrounding area. For every homebuyer this is a very important aspect.”

Also recognising the importance that video can now play as part of a wider property marketing campaign in Engel & Volkers, a global estate agency which has created its own media tool so that their licence partners, including the branch in London, can make their own videos to promote the property online.

Dominique Carroll of Engel & Volkers said that agents seeking to “make a visual impact only” should consider it to be “very important” to use video technology in today’s market, and that her company, like a growing number of agents, now even use drones “to help capture those spectacular aerial shots.”

While images captured by drones can look studying agents do need to be cautious of who they use and check their credentials, according to David Varley, Managing Director, Homeonfilm.

“Lots of agents are using drones,” he said. “But make sure the operator of the drone has a pilot licence as they need it to operate them. Also it’s very restrictive in terms of where you can film, and they do drop out of the sky.”

Lights, camera, computer

TV-style property films provide slick professional video content with a view to enticing the prospective buyer or renter to view the property in person. However, they should not be confused with the slideshow 360-degree tours.

3D walkthrough provide excellent computer videos, usually generated using floor plan software, enabling the viewer to move about the property at the click of a mouse.

Video tours are a far more affordable way of showcasing a property, as are audio tours; a TV-style advertisement which combine photographs with a voiceover or music, complimented by video like moving images, designed to highlight the key selling points of a property.

While property videos are a great tool for enticing prospective buyers to view properties, Varley reports that his firm’s core business has shifted from sending camera crews to properties because “it is expensive” making it “tough to sell” to price conscious agents to making quality 3D property tours from photos, supported by TV quality voiceover.

An impressive response

By emotionally engaging viewers with compelling footage and music, fresh move are finding that clients now fully appreciate the benefits of the properties, says Fiona Gardner, Managing Director at fresh move. “Many of our properties are profiled through video tours. We see video marketing as an important platform to showcase our properties, services and our brand.”
Fresh move has had a positive response to its digital marketing campaign, which has allowed the company to share their video across a multitude of online channels and platforms.
“Since the campaign’s launch in 2015, we have seen a significant uplift in traffic to our website as well as continued advancement of our brand,” Fiona Gardner added.

Create your own TV channel

A number of estate agents are now setting up their own online TV stations offering a wide range of content, including property films, interviews, how to and area guides. James Gardner revealed that fresh move’ latest video advert “really struck a chord” with many consumers receiving over 150,000 views on YouTube in its first three weeks alone.
In addition to YouTube, there are plenty of other computer platforms, like Ustream, Livestream, Roku, among others, that are also able to host these channels, allowing agents to upload and edit their videos or programmes as frequently as they like, adding music in the process.
“Agents can promote these TV channels, which will have all their videos in one place, through social media, upload them on to their own websites as well as the main property portals to accompany their property listings, creating a virtual shop window,” explained Jane Danser of Pure Brand Media.
“The TV videos can be tagged in the same way that you would do with a website, ensuring they can be optimised for SEO (search engine optimisation) purposes, which is great because Google like videos and therefore view them as being SEO-friendly,” she added.
Jane adds that having a TV station and “aspirational” property films can add “enormous value” to a business, and yet she believes that far too many agents still do not appreciate their worth or the fact that they “can enhance their brand.” But over time Jane also thinks that this attitude will change.

No longer just a luxury

Having spoken to various agents, we found that there are a number who still believe that having property videos are a luxury. But the reality is that with production costs having fallen, video is no longer the sole dominion of the high-end property – it is just as valid on a terrace property as it is on a multi-million pound mansion.

The use of film as a marketing tool to sell property is increasingly becoming the norm, especially with the main portals now offering dedicated URL fields for videos, and agents that fail to adopt this type of content marketing may find themselves playing catch up at a later stage.

Contact Fresh Move Estate Agents Exeter Torquay & Bramhall for more information

The homeworking boom

Landlords need to accommodate rising number of tenants who choose to cancel their daily commute.

With increased traffic congestion, mounting rail travel, motoring and parking costs, and rising stress levels related to commuting, more and more people are opting to work from home. It’s a trend that landlords should be aware of and act upon says property lettings specialist, fresh move.

National statistics show that one in seven Britons now work from home. The 4.2million workers who shun the commute in favour of doing their jobs without leaving the house has gone up by 800,000 over the past ten years.

“On-going technological advances that enable people and businesses to connect ‘on the go’ or from virtually any location has, for many, reduced the need to travel to an office,” says James Gardner – Director of Development and Operations

The 24 per cent increase has also been boosted by women seeking to find flexible work arrangements to fit around childcare.

“As employers offer greater flexibility surrounding work hours and location, a growing number of employees are taking advantage and working from a dedicated space at home. An increasing number of tenants now have a home office high on their list of criteria and landlords should be responding to this,” James adds.

Government legislation has also been reviewed this year to reflect the growing trend of small businesses run from private rented properties.

Any private rented property from which a business is operated is now subject to a new law under section 35 of the Small Business, Enterprise and Employment Act 2015.

This newly defined ‘Home Business Tenancy’ allows tenants to operate any business that can reasonably be run from home, with the specific exclusion of the sale or supply of alcohol.

Fiona Gardner – Managing Director of fresh move, says, “Whilst this is a sensible development that will be welcomed by landlords, there are still many other things to consider since mortgage lenders and insurance companies may have clauses in their agreements which restrict or prohibit home working in some properties.

“The terms can often be complex and the new changes do not apply to any tenancy which existed before these provisions came into force, so to accommodate the changing and growing need for ‘home working’ by tenants, landlords should seek out early professional advice from their local fresh move office.”

For landlords interested in capitalising on this trend, fresh move has identified the key components that need to be considered when creating an attractive working area in the home:

• Ample phone and electrical sockets – any home worker is likely to need fast and reliable Wi- Fi connection to the internet, along with one or more phones, computers, scanners and copiers so sufficient power provision is necessary to set up a dedicated home working area.
• Furniture, or the space in which a tenant can put their own – every office at least needs a desk and some storage space and it’s important to consider where furniture might go when installing sockets. Fitting out a small space is challenging but with the right furniture and a little imagination it’s certainly possible.
• Lighting – every home worker needs good lighting, be it from a window or artificial. This should be considered when creating a dedicated working space; if the space is small and doesn’t benefit from a window, appropriate low intensity lighting should be used.

Fiona adds: “Some landlords may not have the option of devoting an entire room to office space but for those that do a relatively small investment can add considerable letting appeal.

“Even if the space is used only for organising bills or for students doing homework, landlords need to realise the demand for a dedicated working space – the kitchen table just won’t suffice anymore. With millions now working from home across the UK, landlords should be considering the changing market and making provisions for it”.


Fresh Move Estate Agents Torquay Exeter & Bramhall.

Please contact us for more information