Last October, the Financial Conduct Authority (FCA) proposed new rules for open-ended property funds, designed to address the illiquidity of commercial property as an asset class. In future, it said, Oeics investing in property must be prepared to act even faster at any sign of a run on their funds, suspending trading if the valuation of 20% or more of their assets is at risk of ‘material uncertainty’.
Has the UK now passed peak buy-to-let? According to one piece of research, by London estate agent Ludlow Thompson, the number of BTL landlords reached a record 2.5 million in the 2017/18 tax year, up 27 per cent from 1.97 million in 2011/12. And landlords owned an average of 1.8 buy-to-let properties each – a figure that had risen for the fifth consecutive year. ‘Rising numbers of landlords show the enduring appeal of buy-to-let, particularly in London,’ says the company’s chairman Stephen Ludlow.
One headline said it all: ‘Brexit is now the single biggest worry for the property industry’. A mid-June survey of owner-occupiers, landlords, property investors and insolvency practitioners by auctioneers John Pye Property found that 38 per cent identify uncertainty around Brexit as the biggest challenge affecting the property sector, with other factors including higher taxation and stricter bank lending trailing behind.
The UK market has lost its allure since the Brexit vote. Alex Garrett gauges its underlying health.
The housing market is clouded by political uncertainty, but demand outstripping supply will support prices, argues Alex Garrett.