Richard Butler Creagh Talks about the market challenges facing property developers heading into 2019.

This year has been difficult for many developers. From falling GDVs to the shadow cast by a looming Brexit, 2018 has not been without its challenges. This 2019, I wanted to share my insight into the often-overwhelming pressure on SME housebuilders and the market challenges that 2019 presents.
The main challenges

Land values
Finding the right opportunities at the right value has been one of the biggest themes of the year. Landowners simply haven’t aligned their expectations with falling GDVs. The result has been narrowing profit margins that have meant some developments are impossible to do and increased competition for sites where the numbers do stack up.

Richard Butler Creagh on Building Social Value in Development Projects

Welcome to the Richard Butler Creagh blog. Richard Butler-Creagh owns Henley Finance which is a short-term bridging finance company specializing in loans for the professional property developer. Here is the reason why social value should be the heart of your development projects.

A sustainable economy is a key goal for the UK. The government has developed a clean growth strategy, which means boosting national income while also cutting greenhouse gases.

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This year they have set regulatory changes at property investors. The government believes they are creating a good playing field between homeowners and landlords by putting up taxes and hiking up legislative loads on property investors. This move can have large detrimental effects on the supply of rental housings in the UK. Richard Butler Creagh and other property investors are widely aware that property still offers significantly higher returns than other investment choices which means many are still nurturing their portfolios while others can join the property market for the first time.

If you are a property investor, here are two major upcoming rental rules that you must prepare for:

Letting agent fee ban

 The “Tenants’ Fees Bill” is expected to be laid out before the end of this year, explaining which fees will not be allowed. It is widely known by many in the industry that landlords may instead incur these fees, as letting agents look at some other ways to make their money. Landlords may now discard their letting agents together and decide to manage their properties alone. While this works for some of those who can manage their lettings business full-time, others may not have sufficient time to comply with their duties as a landlord. But it will be the tenants that will bear the brunt of this changes in one way or the other despite it being enforced to protect them from higher rates.

Tenancy deposit cap

Most of the property investors and landlords take deposits from tenants at the start of a tenancy. This is to cover any costs for loss and damage to the property while the tenants are living in their properties. In another attempt to prevent tenants from incurring large expenses when they move to rental properties, the government has proposed a cap on security deposits. Having this law means that landlords will only be able to take up one month rent as a security deposit from the tenants when they move in. This may seem good news to tenants but it can result in many finding it more difficult to find a suitable rental property. A good example is landlords often require a more expensive deposit from risky tenants like those with pets and families with children. If they are not allowed to do this, they may decide to not let those tenants rent their properties at all.

Being aware of these incoming changes to rental rules is important for property investors in today’s market. A good property investor must understand the changes identified above and put certain measures in place to start preparing them sooner to avoid being caught. If you need a loan to purchase a buy-to-let property, contact Henley Finance. Visit the official website of Richard Butler Creagh here. Follow the Richard Butler Creagh Twitter page for the latest news on bridging finance and watch this video to find out more.

Richard Butler Creagh on Commercial Property Investment 

Welcome to the Richard Butler Creagh blog. Commercial investment in central London has seen its most powerful trading in almost a decade, per Savills. The real estate adviser announced that over £2.3bn was invested in central London commercial property in July alone, with total turnover for 2017 to the end of July reaching £11.5bn, a 24% increase on the same time last year. July was the strongest month recorded since March 2007 for Central London as sales were improved by the acquisition of 20 Fenchurch Street for almost £1.3bn to a Hong Kong-based property group.

Savills found that Asian investors continued to dominate the central London market, accounting for 63% of total City turnover in the year so far, while European and UK investors stood at 17% and 11% respectively.  In the West End, Asian investors accounted for 50% of turnover with UK institutions accounting for just 2% of acquisitions by turnover. This was also predicted by property development expert Richard Butler-Creagh.

“The first half of 2017 saw central London investment increased 12.3% on the same period last year; while we’re only a month into H2, the power has continued and total 2017 investment volumes may well exceed those of 2016,” said Stephen Down, head of Savills central London investment team.
“Although the limitations announced earlier in August by the Chinese government will decrease real estate investment from mainland Chinese property developers and institutions, investors from Hong Kong, who have been particularly busy in the market in the past year, are likely to continue to be active, however, we have noticed their buying criteria has become increasingly selective.”

Savills reported that its prime City yield was currently 4%, while prime West End yield stood at 3.25%. Stephen added: “We expect there to be more stock coming on to the market as we approach the end of the year as existing owners of investments to take profits and, provided these sales are priced correctly, we should see continued strong turnover activity in the next three to four months.”

Richard Butler Creagh is the founder of Henley Finance. Find out more about getting the right finance for you on the Henley Finance website.

Watch this video to find out more about Richard Butler Creagh and property investment.