Knight Frank: Specialist Property Sector Report

2018-01-02


The following is a summary of this report by Knight Frank[1], part of a series completed in 2017 detailing major trends, opportunities, performance and predictions of the UK specialist property sector.


Tax Relief

In April, Landlords stopped benefiting from income tax relief in the buy-to-let sector. This means that many landlords with a large amount of assets would sell part of their portfolio, meaning many tenants are looking for their next accommodation.


Supply Vs Demand

According to the report, in 2039 the population will be 74 million. There will be a strong need for high quality housing. The current demand is for as many as 240,000 new homes per annum, but with little to no housing provided by the government, only 130,000 units are being delivered. The numbers explicitly indicate that the supply is barely passing the halfway point.


Factors Affecting Momentum

These include land supply, with high competition for sites still remaining an issue. According to Knight Frank, planning policy needs to be amended in terms of minimum space, as developers start to use space more efficiently, within compact environments and in turn offering an affordable living space.


Opportunities for Investors

In the upcoming years you may find developers offering bulk transactions. After Brexit, the weakening of the pound may attract investors who want to take advantage during the dip. The topic of branding also appears in the report – if companies can create an authentic brand, it would increase brand loyalty and drive sales. With HS2, the Elizabeth line and various infrastructure improvements happening all around the UK, there are new opportunities for investors in areas previously ignored.

Diversification is one of the final opportunities mentioned, and has always been a popular risk management technique[2]. There are several ways to invest in property, and Homegrown is an online crowdfunding platform that connects experienced small to medium sized developers with financing from everyday investors, allowing you to diversify your portfolio beyond buy-to-let and into the world of alternative finance and crowdfunding. Find out more information by signing up or simply email one of our friendly team members at info@homegrown.co.uk.


Sources:

  1. Knight Frank / Specialist Property Report
  2. Investopedia / Diversification

Your capital is at risk if you invest in property. This includes illiquidity (the inability to sell assets quickly or without substantial loss in value), and the loss of invested capital if the wider property market or an individual property suffers a reduction in value. Investments on Homegrown are not covered by the Financial Services Compensation Scheme. Past performance and forecasts are not indicative of future performance. For more information see our full risk warning. Homegrown Group Limited is authorised and regulated by the Financial Conduct Authority (FRN: 694952). Investments through Homegrown are equity investments.
Future performance is not guaranteed and is based on projections only. Your capital is at risk if you invest in property. For more information see our full risk warning.