We spoke to Tom Markham, Sales Manager for St Leonards Quarter to find out more.

Q: How would you describe the current market for property in Exeter?

A: Demand for property in Devon, and in Exeter in particular, is really high. Over the last year or so there have been a lot of buyers wanting to move to the South West from the Home Counties and Bristol, who like the fact that Devon is that bit closer. Prices in Exeter have risen around 15% since 2018 and a lack of supply is keeping demand, and prices high.

(According to Rightmove, in the year to May 2022 competition for property in Exeter, measured by the number of people enquiring about each available property, more than doubled (+110%), growing faster than in any other city in the UK.)

Q: How did Acorn find this site?

A: Acorn were invited to bid on the site and went through a selection process, which led to us being selected as the preferred bidder. ERADE (The Exeter Royal Academy for Deaf Education) were keen to leave a legacy and wanted to find a developer that would provide best value but also deliver a quality scheme.

Selling the site funded ERADE’s purchase of their new site in on Douglas Road in Exmouth. They then sold us a portion of the land and used the proceeds to complete the build of their new premises. On this land we have started works on Rolle Gardens*, a new development of 1- 4-bedroom houses and apartments.

Q: How easy was it to get planning permission for this project?

A: Given the constraints of building on an urban site right in the heart of the city, we were really pleased to get planning permission for our first application in 2018. We spent a lot of time working on our application prior to submission. The resulting scheme has a mix of apartments and townhouses that, we feel, maximise the site’s potential.

Q: What do you anticipate as the likely buyer demographic for St Leonards Quarter?

A: The development features a broad range of homes, from 1-bed apartments right the way through to 5-bed townhouses, so there is something to appeal to every demographic. It is in a fantastic location, close to local schools, shops, the river and the centre of Exeter, as well as being just a 10-minute drive from both of Exeter’s stations (Exeter St David’s and Exeter Central). So we anticipate it being very popular with first-time buyers, young professionals and holiday-let investors, as well as downsizers.

It’s also just a 20-minute walk from the Royal Devon and Exeter Hospital, so it is likely to appeal to NHS staff. In fact, a significant proportion of the people who have already registered their interest in the project, perhaps as much as 10%, are NHS doctors and nurses.

Q: What have been the main challenges in relation to this build?

A: We got planning permission in 2018, and began demolition in 2019. The academy that formerly occupied the site was a major demolition project. We began groundworks, including site clearance, in October 2021 and construction in February 2022.

So the process has taken a long time, partly because we were managing it through Covid, but also because we spent a lot of time finding the right provider for the care home element of the planning approval and then selling them the land.

Due to the size of the scheme, we currently have three contractors on site, which is unusual. So this is a fairly complex build.

Q: How would you describe the architectural style of the development?

A: The homes are contemporary with a light and airy feel. To reflect the local vernacular, we’ve chosen bricks with a slightly reddish tone for the façade.

The site is on one of the main road corridors into Exeter city centre, not far from the St Leonards conservation area, which has distinctive Georgian and Victorian architecture. The architects have replicated this, with six residential streets and a variety of homes, from townhouses to apartments, which sit side by side in the same urban block. We like to draw upon the heritage of the sites on which we build, and we’ll be naming the new streets after some notable alumni of the former academy.

Q: What sustainable elements will feature in Phases 1 and 2?

A: Given that this is a brownfield site, repurposing the site will minimise damage to the environment, which is why the majority of Acorn projects are on brownfield land. The site is also very close to the centre of Exeter, with bus stops just outside and a wide range of local shops and amenities within a short walk, so we anticipate residents being able to minimise their car usage.

With any new-build scheme, we incorporate as many sustainable elements as possible, so in Phase 1 all homes with have an EPC ‘B’ energy rating, achieved through triple-glazed windows throughout, smart thermostats, sustainable drainage systems (SuDs), passive EV charging points, underfloor heating in selected houses and solar Photovoltaic (PV) panels on most of the houses.

We will also be enriching the green space, and enlarging the pavement outside to create a new cycle path, construction of which is already underway.

In Phase 2 we will incorporate co-car, shared parking spaces and air source heat pumps.

Q: When do you anticipate Phase 1 going on sale?

A: We expect the first houses (East Court) to be completed in late Spring/Summer 2023 and the apartment block to be completed by the end of 2023. The apartments will be released for sale later this summer, with the East Court houses following towards the end of Autumn.

Q: When do you anticipate starting Phase 2?

A: We hope to start construction on Phase 2 early in 2023 so that we can have a seamless transition from Phase 1.

Q: Do you anticipate doing more of this type of project?

A: St Leonards Quarter is in a perfect city-centre location, with great transport links,  shops and schools a short walk away, and with the river close by. We’re always on the lookout for sites like this, but the main difficulty is finding them.

*Rolle Gardens, Exmouth. For more information, click here

The post Spotlight on St Leonards Quarter, Exeter appeared first on Acorn Property Invest.

Given their rich history and economic significance dating back several centuries, it is easy to see why market towns have retained their appeal. Combining rural charm, period architecture and a sense of community with a wealth of urban amenities, they offer the perfect blend of character and convenience. For this reason, homes in market towns typically command a significant premium compared with neighbouring towns, and that differential is increasing.

How much extra will people pay to live in a market town?

House prices in market towns were, on average 11% higher than in surrounding areas according to findings by Lloyds Bank in 2015. By 2020 that premium had risen to 12% and a year later that figure had grown to 13%, according to findings by Halifax. And for the most desirable market towns the premium was significantly higher, for example Marlborough in Wiltshire, where prices were on average 67% higher than the average for the county.

What makes market towns unique?

• A regular, functioning market that drives footfall to the town and serves as a focus for the community. Often these include craft or farmers’ markets featuring local produce. These markets often come into their own at Easter, Christmas and in the summer when they attract visitors to the town.
• Market towns act as an economic focus for the surrounding area, featuring financial and professional services (banks, solicitors, accountants, medical centres) as well as retail and leisure facilities, pubs and restaurants.
• Good transport links to other major towns and cities, including frequent and/or direct trains to London.
• Close proximity to the countryside, often including Areas of Outstanding Natural Beauty or coastline.
• A river, which adds to the town’s aesthetic appeal.
• Well-preserved historical buildings and homes featuring Georgian, Regency or Victorian architecture. Often this includes conservation areas which lend the town character and charm.
• Due to their established position in the surrounding area, they often feature highly regarded schools.

We are always delighted when we find suitable development sites in market towns in the South West. We work carefully with the local community to ensure our projects respect and enhance their surroundings, preserving listed buildings, such as Oliver Buildings in Barnstaple wherever possible.

Our current and forthcoming projects in market towns include:

• Riverside at Baltic Wharf, Totnes (Devon)
• Longcroft at Cubis Bruton, Bruton (Somerset)
• Oliver Buildings, Barnstaple (Devon)
• Gatcombe Orchard, Wrington (Somerset)
• The Old Printworks, Frome (Somerset)

If you’d like to find out more about Acorn’s range of investment opportunities offering quarterly income or capital growth, please contact Investor Services on 0203 858 9881 or via email at investor.services@acornpg.org.

YOUR CAPITAL IS AT RISK IF YOU INVEST

Investment opportunities available via Acorn Property Invest are exclusively targeted at exempt investors who are experienced, knowledgeable and sophisticated enough to sufficiently understand the risks involved, and who are able to make their own decisions about suitability of those investment opportunities. All investors should seek an independent professional investment and tax advice before deciding to invest. Any historic performance of investment opportunities is NOT a guide or guarantee for future performance and any projections of future performance are not guaranteed. All investment opportunities available via Acorn Property Invest are NOT regulated by the Financial Conduct Authority (FCA) and you will NOT have access to Financial Services Compensation Scheme (FSCS) and may not have access to the Financial Ombudsman Service (FOS).

The post What lies behind the enduring appeal of market towns? appeared first on Acorn Property Invest.

We caught up with Sean Butcher, Regional Sales Manager for Old County Hall, to find out more.

Q: How would you describe the current market for property in Truro?

A: Property in Cornwall is selling really well and stock is still very limited, which is helping to maintain demand. Truro has everything you could possibly want in a place to live. It’s a very vibrant city with everything on your doorstep including beautiful countryside and fantastic beaches. (According to Rightmove average asking prices in Truro rose 14.8% to £323,200 in the year to April 2022, making it the UK’s second most popular destination after Bath, at 15.0%.)

Q. How easy, or otherwise, is it to build in Truro?

A: The local planning authority appreciate that high-quality housing brings much-needed inward investment, as well as improving both the overall quality of housing stock and the public realm generally. They take a very flexible approach to working with housebuilders, as long as any development is sensitively carried out and respects Truro’s unique character.

Q: What do you anticipate as the likely buyer demographic for Old County Hall?

A: With its stunning period features and central location, we anticipate this development appealing to a wide range of buyers, in particular first-time buyers. Old County Hall is just a 5-minute walk from Truro station and a 15-minute walk from the city centre, which makes this development perfect for commuters and young professionals. The Royal Cornwall Hospital is a major training hospital and only 5-minutes away by car so the site is a great location for NHS staff, which will also make it attractive to investment buyers.

We’ve already had some expressions of interest. We’ll have signage and a mobile marketing suite on site from day one, and that’s when we would expect expressions of interest to really take off.

Q: What period features will you be retaining?

A: The windows; timber panelling in the chamber; the central chamber cornice (which will be concealed under the apartment ceilings); the roof turrets; the existing front door; the entrance lobby and, where possible, the internal doors. 

Q: What are the main challenges when converting a Grade II-listed building?

A: As with any listed building the biggest challenge is preserving the original features while bringing the building up to current regulations on insulation and energy efficiency. The original windows, for example, are part of Old County Hall’s unique character, which is why we will be adding secondary glazing rather than replacing them.

We will also be heating the building via energy-efficient Ground Source Heat Pumps, so installing the heating system into the building under the existing structure requires careful consideration. 

Q. What sustainable elements will you be incorporating into the design for the existing building in Phase 1?

A: We are thermally upgrading the existing fabric to make the building more energy efficient, by insulating the external walls and roof, as well as adding secondary glazing to the existing windows. We will also be installing underfloor heating via a Ground Source Heat Pump, as well as low-energy LED lighting throughout. EV charging points will be installed in every allocated and visitor parking space. 

Repurposing the existing building will aim to save between 50%-70% of embodied carbon emissions compared with a new build, and adding modern levels of insulation and modern heating/ventilating technology will significantly improve Old County Hall’s operational energy efficiency. 

Q: When do you anticipate Phase 1 going on sale?

A: We anticipate being able to start construction on P1 early in 2023, at which point the homes will go on sale. 

Q. When do you anticipate starting Phase 2?

A: Phase 2 will start as soon as Phase 1 is sold, ideally before we complete construction on Phase 1 so that we can remain on site. 

Q. How will the design of Phase 2 complement Phase 1?

A: We have purposely set P2 at a distance from the existing structure, to give the listed building greater space and enhance its setting. Rather than try and mimic the look of the listed building, which can end up creating a pastiche, we’ve chosen to define the buildings as two independent structures using different materials. P2 will be a very modern, five-storey design. The penthouses will have a fantastic view of the cathedral, and the building’s flat roof and stepped form will incorporate areas of green ‘living’ roof.

P2 will incorporate simple block forms and fenestration, using natural and durable materials and motifs while still maintaining a modern aesthetic. The design will emphasise the horizontal over the vertical, with floor-to-floor banding and distinct  materials for different stories and windows, the orientation and proportions of which replicate that of the listed building. The lower storey will straddle the access road, suspended and supported by an open structure.

Q. What sustainable elements will you be incorporating in the design for Phase 2?

A: In line with our Acorn Green ethos, the building fabric will be high performing to achieve a minimum EPC A rating. It will be heated via a Ground Source Heat Pump with each unit having a Mechanical Ventilation with Heat Recovery (MVHR) unit. Photovoltaic (solar) panels will also be installed to reduce the energy use of communal lighting and power, and EV charging points will be installed in every allocated and visitor parking space. 

Q. Do you anticipate doing more of this type of project? 

A: This is a great Acorn project. We love being able to bring an old building back to life, particularly one with a wealth of period features and a great location. 

Repurposing an existing building on a brownfield site enables us to minimise disruption to the local environment and make a significant saving in terms of a project’s embodied carbon. And being just a short walk from local amenities minimises car usage, which fits with our sustainability criteria. 

It’s very exciting for us to be building in a city-centre location, as, at Acorn Blue, we’re more used to building close to the coast. We’re always on the lookout for this type of development and hope to do many more.

The post Spotlight on Old County Hall, Truro appeared first on Acorn Property Invest.

The recently published White Paper, ‘A Fairer Private Rented Sector’ aims to ‘empower tenants … [to] raise concerns and challenge unfair rent hikes without fear of repercussion’.

Key proposals include:

• Abolishing Section 21 ‘no fault’ evictions, thereby making it harder for landlords to evict a tenant without having to prove tenant wrongdoing.
• Limiting rent increases to once per year and ending the use of rent review clauses.
• Moving all tenants on to ‘periodic’ tenancies with no fixed end date; tenancies will only end when the tenant decides, or if the landlord has a valid reason.
• Making it illegal for landlords to refuse to rent to families with children or people on benefits.
• Creating a Private Renters’ Ombudsman to that rent disputes can be settled without having to go to court.

To address landlords’ concerns, the White Paper also includes new protections for landlords, such as eviction becoming mandatory where a tenant has been in at least two months’ arrears, three times within the previous three years. Under current rules, however, a landlord would be able to repossess a property from a defaulting tenant without having to wait three years for them to miss six months’ rental payments.

Plus, Buy to Let yields are at a record low

Gross rental yields in the UK are at a record low of 4.38%. With rising interest rates eating into rental income and increasing the cost of mortgage payments, experts are predicting a new low of 4.26% by the end of the year. According to Hamptons, if the base rate climbs from 1.25% currently to just 2%, the average higher-rate landlord will see their profits more than halve. Capital Economics is forecasting that the base rate will hit 3% next year. At 3%, a typical landlord in London would lose a staggering £2,180 per year; even at 2% they would be out of pocket to the tune of £501 per year.

While demand for rental property is at an all-time high, rent growth is capped by tenant affordability and can’t simply keep rising to offset the cost of higher mortgage payments. In addition, when the proposed reforms become law, rent reviews will be limited to once per year, regardless of rising mortgage rates.

Will Buy to Let landlords weather the storm?

With rental yields so low and obligatory energy efficiency improvements eating into profits, many commentators are viewing the proposed reduction in landlord protections as the straw that will break the back of Buy to Let. Given that property prices are at an all-time high, selling up would certainly seem an attractive option for many landlords.

But property is a highly inflation-resistant asset, and those landlords that can afford to do so will want to hold on to their investment. In five years’ time, the current market uncertainty will have passed, the Renters Reform Bill and other legislation relating to second-home ownership, such as Making Tax Digital will be widely understood, and rental yields will have returned to more normal levels. And with the Government reportedly considering Capital Gains tax breaks on second-home sales as a way of releasing housing stock on to the market, landlords who hold on will likely be glad they did so.

Since the cost of energy efficiency improvements can run into thousands of pounds, and since rental properties with regulation-compliant EPC ratings are already able to command a premium, investing in a new-build property that already conforms to current regulations can remove one layer of stress and uncertainty for landlords.

For more information on Acorn’s developments please visit www.acornpropertygroup.org

For more information on Acorn’s current investment opportunities please visit www.acornpropertyinvest.com

YOUR CAPITAL IS AT RISK IF YOU INVEST

Investment opportunities available via Acorn Property Invest are exclusively targeted at exempt investors who are experienced, knowledgeable and sophisticated enough to sufficiently understand the risks involved, and who are able to make their own decisions about suitability of those investment opportunities. All investors should seek an independent professional investment and tax advice before deciding to invest. Any historic performance of investment opportunities is NOT a guide or guarantee for future performance and any projections of future performance are not guaranteed. All investment opportunities available via Acorn Property Invest are NOT regulated by the Financial Conduct Authority (FCA) and you will NOT have access to Financial Services Compensation Scheme (FSCS) and may not have access to the Financial Ombudsman Service (FOS).

The post What impact will the Government’s New Deal for Renters have on Buy to Let? appeared first on Acorn Property Invest.

With over 40 completed developments in the region and three regional offices, here are ten reasons why we at Acorn believe the market for property in the South West offers exceptional growth potential:

1. Highly stable and diversified demand

The South West is the UK’s number one choice for second homes, with families, downsizers and retirees combining with local buyers and buy-to-let student landlords, to form a diverse and stable property-buyer demographic.

2. Strong population growth

The South West is forecast to have the second-highest population growth of any English region in the ten years to 2028, rising by approximately 7%. Between 2003 and 2008 the population of the South West grew faster than that of the UK as a whole, with nearly all of the growth attributable to inward migration. We believe the pandemic has likely accelerated this trend.

3. Fastest ever property price growth

In 2021, Cornwall became Rightmove’s most searched-for destination, with Devon and Bristol close behind. Savills is forecasting house price growth of 13.1% in the South West over the next five years, with coastal areas seeing the strongest increase.

4. Significant undersupply

The South West has one of the most acute housing shortages of any region in the UK. While the UK is facing a chronic shortage of housing generally, this is most pronounced in areas of strong demand, where insufficient supply is compounded by a lack of high-quality housing.

5. Most sought-after region for second homes

There are more second-home owners with a property in the South West than in any other English region (27% in 2019). Since the pandemic, owning a backup UK holiday home for rental as an Airbnb when not in use, has become an even more popular option. And with large student populations in Bristol, Bath and Exeter, investing in buy-to-let is a highly attractive proposition.

6. Most sought-after region to retire to

The South West has the oldest population of any region in the UK, with around 1.2 million people, or 22% of the population of state pension age. Between 2003 and 2008 the number of people in this age group in the South West grew at more than twice the rate of overall population growth and with an ageing population, we anticipate demand continuing to rise.

7. One of the UK’s fastest-growing economies

In 2021 the economic growth rate of cities in the South West was 8.2%, well above the UK average of 7.4%. The South West is one of only two English regions expected to compete with London economically over the next three years, with Bristol and Exeter two of the fastest-growing cities in the UK.

8. Rapidly improving connectivity and transport links

With ongoing investment in Cornish railways and a new dual carriageway that is set to slash journey times from Exeter to Penzance, plus three international airports and fast trains to London, the South West is becoming an increasingly attractive destination.

9. Popularity with WFH relocators

Young professionals are increasingly choosing to base where they live on lifestyle considerations rather than proximity to a place of work. The South West offers the perfect work/life balance, with a wealth of good schools, fifteen Areas of Outstanding National Beauty and many of the UK’s best surf and sandy beaches.

10. Underpopulated and ripe for development

The South West has the lowest population density of any English region. While this is one of its key attractions, it also makes the South West ripe for development.

Please visit our website for more information on Acorn’s live investment opportunities across the South West: Oliver Buildings, Barnstaple (Devon) and St Leonards Quarter, Exeter (Devon)

YOUR CAPITAL IS AT RISK IF YOU INVEST

Investment opportunities available via Acorn Property Invest are exclusively targeted at exempt investors who are experienced, knowledgeable and sophisticated enough to sufficiently understand the risks involved, and who are able to make their own decisions about suitability of those investment opportunities. All investors should seek an independent professional investment and tax advice before deciding to invest. Any historic performance of investment opportunities is NOT a guide or guarantee for future performance and any projections of future performance are not guaranteed. All investment opportunities available via Acorn Property Invest are NOT regulated by the Financial Conduct Authority (FCA) and you will NOT have access to Financial Services Compensation Scheme (FSCS) and may not have access to the Financial Ombudsman Service (FOS).

The post 10 reasons why your property portfolio should include the South West appeared first on Acorn Property Invest.

Acorn completed the development of Brandon Yard, Bristol in April 2019 after an 18-month build. The site comprises three buildings, of which two are Grade II-listed (West Purifier House and Engine House) and the third was a sensitively designed new build to complement the existing site. The fifty-eight 1-, 2- and 3-bedroom apartments and two houses are on a prime site in the heart of Bristol’s City Docks Conservation Area, on the northern section of Bristol’s Floating Harbour overlooking Brunel’s SS Great Britain.

Rich industrial past

When Acorn acquired the site of the former Bristol & Clifton Gaslight Company, it had lain derelict for over 40 years. Gas had been produced there, using coal and then water, from the mid-19^th century until the gasworks fell into decline in the 1960s and ultimately closed in 1970.

Thanks to its proximity to the river, the site has a rich industrial past. It originally housed a limekiln glassworks from the 17^th century until the building was demolished in 1838, and was then briefly converted for use as a timber yard before moving to gas production.

The buildings at Brandon Yard date from this period. At West Purifier House, as the name suggests, impurities were removed from the gas. Engine House housed the boilers, steam engine and exhauster pumps, which pumped the gas into the pipe network. Both were built using locally-sourced, square-coursed Pennant stone, with a detached brick chimney that Acorn restored and retained as a feature of the development.

The site’s bordering streets still retain the names Lime Kiln Road and Gasworks Lane.

Acorn preserved the site’s history while sensitively modernising it

With only the external structures and boundary wall having listed status, the site presented a blank canvas upon which to work. Acorn hired a local award-winning architect specialising in the conversion of historic industrial buildings (including the neighbouring Purifier House) to design contemporary dwellings that would bring the site to life while respecting its heritage. Materials were carefully selected in a palette that complemented the monumental quality of the old stonework, and glazing was used throughout to add light and space.

West Purifier House was renamed Oculus House after the magnificent circular windows on the gable ends. Engine House was converted into two, two-bedroom houses that conserve as much of the original brickwork as possible, each with a terrace overlooking the harbourside.

And in a nod to the site’s past, the newly-built New Retort House was named after the dry distillation device that is used in the manufacture of gas by heating coal in the absence of air. The building was designed with double height bays framed with a brick carefully selected to highlight the colours and character of the stone, infilled with floor to ceiling glazing. Metal panels were used to reflect the industrial character of the site, and the building was given a contemporary feel with river-facing balconies, terraces and a sleek floating roof.

Sustainability was a key feature of Acorn’s vision for Brandon Yard

In line with our commitment to driving down the carbon footprint of our homes, we at Acorn believe passionately in re-using wherever possible. The majority of our projects are on brownfield sites, thereby minimising disruption to the local environment. And by repurposing an existing building wherever possible, we save between 50%-70% of embodied carbon emissions (the CO₂ emitted prior to a building becoming operational i.e. during the construction process) compared with a new-build scheme.

To minimise car usage, we believe that a commitment to sustainability should involve building in central locations such as Brandon Yard, wherever we can. We were, in addition, able to significantly improve the operational energy efficiency of the existing buildings at Brandon Yard through the installation of double glazing and modern levels of insulation and heating and ventilation technology. Here, for example, we transformed the derelict Oculus House into EPC B- and C-rated dwellings.

Sustainable features of the project include:

• Five EV charging points and extensive cycle storage in the undercroft.
• Communal boilers with Heat Interface Units (HIUs) in each apartment rather than individual boilers. HIUs act as a bridge between a central boiler and the hot water outlets in individual apartments. By delivering hot water on demand they reduce energy wastage from heat build-up or dissipation after use, and allow for eco-friendly temperature control.
• Extensive glazing, including a long, glazed roof gallery at Oculus House, which was used to wash light into the interiors, thereby reducing reliance on electric lighting. A small touch, but the windows in both Engine House and Oculus House were given splayed reveals for that same reason.
• Generous lining of external walls and of the steel frame in New Retort House, to produce U-values that exceed current regulations on insulation.
• Photovoltaic (solar) panels on the flat roof of New Retort House.
• Low energy LED lighting throughout.
• An EPC energy rating of B in the apartments at New Retort House.
• Significant green planting throughout, including native species and bee-friendly planting and low hedges to improve the local micro-climate of this formerly derelict site.
• Improvements to the public realm, with a communal paved and landscaped courtyard featuring benches and lighting surrounded by multi-stem trees, and an improved path to open up the harbourside to pedestrians and cyclists.
• A £519,000 contribution to fund infrastructure improvements, facilities and services in the city, as well as an off-site affordable housing contribution of £398,000.

We are proud to note that Brandon Yard has won several prestigious industry awards:

• Best Residential Development (Bristol Property Awards 2019)
• Development of the Year (RESI Awards 2019)
• Small Residential Development of the Year (Insider South West Residential Property Awards 2020)
• Design Award (Bristol Civic Society 2021) – one of only three projects to receive this accolade

Please visit our website for more information on Acorn’s live investment opportunities featuring listed building conversions in Cornwall (Old County Hall, Truro) and Devon (Oliver Buildings, Barnstaple).

Take a closer look at Brandon Yard and find out more about Acorn’s vision: The Benefits of Re-using Existing Buildings

YOUR CAPITAL IS AT RISK IF YOU INVEST

Investment opportunities available via Acorn Property Invest are exclusively targeted at exempt investors who are experienced, knowledgeable and sophisticated enough to sufficiently understand the risks involved, and who are able to make their own decisions about suitability of those investment opportunities. All investors should seek an independent professional investment and tax advice before deciding to invest. Any historic performance of investment opportunities is NOT a guide or guarantee for future performance and any projections of future performance are not guaranteed. All investment opportunities available via Acorn Property Invest are NOT regulated by the Financial Conduct Authority (FCA) and you will NOT have access to Financial Services Compensation Sch

The post Repurposing a listed building to create sustainable, 21st-century homes: Brandon Yard appeared first on Acorn Property Invest.

When you mix together geopolitical uncertainty, interest-rate hikes, concerns about the Chinese economy and output, inflation and changes in consumer trends post-Covid, the result is increased market volatility. Last week saw the highest volatility in the price of Bitcoin for two years, and since the beginning of the year, the FTSE 100 has moved in a range of 705 points, just shy of 10% of its overall value.

Inflation destroys value

Inflation erodes people’s spending power over time as well as the value of their savings, and makes investing far more uncertain. As an illustration, with inflation at 9% an investment of £1,000 would need to earn 9% interest simply to stand still; since the best rate on offer for a notice savings account is currently a meagre 1.63%, there’s little benefit putting your money into a savings account.

Property performs well in times of high inflation

Property is one of the very few asset classes that can weather the storm of a high inflationary environment, and one that tends to benefit as other assets lose value in real terms. Due to the essential nature of property (i.e. people need somewhere to live), it tends to withstand short-term shocks better than other, non-essential investments.

Property has proved its resilience time and time again, even during times of economic uncertainty. If you drew a line on a house price graph from 1972, when the average house cost just under £7,000, through the next 50 years to 2022, it would be easy to see that house prices have risen a staggering 4,000%. In just the last ten years, in fact, the average cost of a house has risen by 70% (from £167,854 to £286,079 today).

Historically, whenever the FTSE 100 has suffered a sustained fall, the UK House Price Index has correspondingly risen. In fact, Real Estate Investment Trusts (REITs), which invest in income-generating real estate including apartment blocks, tend to outperform the market when inflation is 7% or higher (and conversely underperform when inflation is 2.5% or lower). With rents and asset values increasing in times of inflation, REITs are often a first port of call for investors during inflationary periods.

Demand for property is at an all-time high

As the data shows, demand for property, both sales and rentals, is currently breaking all records. Since the beginning of 2020, when the average house in the UK cost £231,940, house prices have risen over 23%. Some property hotspots, such as Padstow in Cornwall, saw prices rise by 20% in the 12 months to December 2021. And the speed of increase is accelerating: nationally, prices have risen over 14% over the course of the last 12 months alone.

According to Rightmove, the current rental market is the most competitive ever recorded, with average rents in March 2022, 15% higher than they were two years previously.

The lack of housing on the market, coupled with a housing shortage across the UK generally, is keeping premiums under pressure. Until more stock comes on to the market, demand will continue to outpace supply and that will keep prices high, even in the face of rising interest rates and inflation.

Investing in property online is simple

One of the easiest ways to diversify your portfolio into property is by investing online. Acorn have a range of fixed-rate, fixed-term products to suit every investment objective, be that regular income, capital growth or both. Our online investments in Acorn developments offer returns that compare favourably with most other asset classes, in a [relatively stable/inflation-proofed] asset.

We offer redeemable shares in individual developments or a portfolio of Acorn developments, as well as peer-to-peer loans that can also be invested within an IFISA wrapper to achieve tax-free gains. Peer-to-peer loans offer investors particularly good rates because, by cutting out the middleman and lending to specialist organisations, they enable investors to receive both a premium, and a higher proportion of the interest.

There’s never been a better time to diversify your portfolio

Low interest rates over the last few years have diminished the rates of return on offer from cash investments, even before factoring in the negative impact of inflation. Online property investing is simple, quick, transparent and can offer inflation-beating returns in an asset that can weather the highs and lows of short-term economic uncertainty. There has never been a better time to diversify your portfolio.

If you’d like to find out more about Acorn’s range of property investment opportunities offering quarterly income or capital growth, please contact Investor Services on 0203 858 9881 or via email at investor.services@acornpg.org.

YOUR CAPITAL IS AT RISK IF YOU INVEST

Investment opportunities available via Acorn Property Invest are exclusively targeted at exempt investors who are experienced, knowledgeable and sophisticated enough to sufficiently understand the risks involved, and who are able to make their own decisions about suitability of those investment opportunities. All investors should seek an independent professional investment and tax advice before deciding to invest. Any historic performance of investment opportunities is NOT a guide or guarantee for future performance and any projections of future performance are not guaranteed. All investment opportunities available via Acorn Property Invest are NOT regulated by the Financial Conduct Authority (FCA) and you will NOT have access to Financial Services Compensation Scheme (FSCS) and may not have access to the Financial Ombudsman Service (FOS).

The post Inflation-proof your portfolio with an investment in property appeared first on Acorn Property Invest.

Charging interest is not permitted

A key belief in Shariah is that wealth should be evenly distributed, and used to bring about social justice and improvement for all. For this reason, investments on which interest is charged, or which contain an interest element, are strictly forbidden. The concept of charged interest or ‘riba’, loosely translatable as usury or lending money at excessively high interest rates, is deemed an exploitative practice as it can allow a lender to profit from someone else’s debt burden. Shariah is intended to ensure equity in exchange, promoting charity and helping others through kindness. In order to earn money without charging interest, Islamic banks instead receive a percentage of the profit generated by a business.

Minimal debt burden

The concept of riba also means that Shariah investments can only be made in businesses with minimal debt, since risk/high levels of debt are to be avoided. Borrowing on interest is haram, and borrowing must be limited to a tolerable level, generally interpreted as a debt-to-equity ratio of no more than 33%. Another restriction is that Shariah-compliant companies should have accounts receivable (i.e. money owed by the company’s debtors) and cash of no more than 50% of their total assets.

Which activities are haram (forbidden)?

Shariah-compliant investments must avoid activities such as:

• Conventional finance, i.e. non-Islamic banking and insurance
• Drug (including tobacco) and alcohol production
• Gambling
• Adult entertainment
• Weapons and defence
• Anything relating to pork meat production

How does Shariah-compliant investing work?

For Shariah-compliant investors, transparency is essential. Most Shariah-compliant funds will have a Board of between three and five Islamic experts and scholars, who screen each investment in much the same way as managers would with an ESG fund. Funds must be audited annually to ensure full compliance with Shariah principles. If any income is generated that breaches Shariah principles, such as interest, it must be purified by being given to charity.

FTSE Russell and MSCI offer specific indices for Shariah-compliant companies and there are funds based on these, which are generally run on a ‘passive’ basis (i.e. trackers) to replicate the performance of the main index.

In terms of equities, funds are often heavily weighted towards sectors that are less likely to contravene Shariah principles such as healthcare, IT, property and construction.

What is a Shariah-compliant mortgage?

Given the constraints of riba, Sharia-compliant mortgages function quite differently from regular mortgages, a key element of which is charged interest. With a Shariah mortgage, the bank buys the property on the homeowner’s behalf and becomes the legal owner. Monthly payments function as part rent, part capital i.e. a portion of the payment goes towards buying out the bank’s stake. At the end of the mortgage term the homeowner has either acquired the property from the bank in full or they will have a single lump sum left to pay before becoming the legal owner. Most UK banks and building societies now offer Shariah mortgages.

What are the main types of Shariah-compliant investment?

Property is generally deemed Shariah-compliant because it increases in value simply through market growth without exploiting another individual for personal gain. As a result, it is often a key element in Shariah-compliant investment funds. Other types of shariah-compliant investment include:

• Shares – similar to property, any gain earned from a share increasing in value is halal, as it was achieved through an increase in market growth and did not involve the exploitation of another individual for personal gain.
• Sukuk – this is a term for a type of bond where stakeholders gain partial ownership of the issuer’s assets until the maturity date, and receive a share of the profit generated by the underlying asset rather than a fixed-interest payment. Sukuk are akin to the conventional concept of securitization (whereby an asset is converted into marketable securities and sold to investors) in that a special purpose vehicle (SPV) is set up to acquire assets, then these underlying assets are transferred to a wide range of investors in the form of certificates representing their proportionate value.
• Venture capital and private equity, providing the underlying activity of the businesses is Shariah-compliant.
• Tafakul – a type of Islamic insurance covering health, life and general insurance. Tafakul pools members’ money and combines it in a fund that guarantees each other.

Investing with confidence

The growth in recent years of socially responsible, or ethical investing, has seen an increase in the number of investment opportunities that comply with Shariah principles in the broadest sense. There is a great deal of overlap between the two, with a strong focus on societal good, environmental stewardship and corporate governance. However, the constraints of riba can transform an ethically-compliant company into a haram Shariah investment. Investors seeking Shariah-compliant investments must therefore do their own due diligence if an investment is not specifically advertised as being Shariah-compliant.

At Acorn, our underlying principles focus on sustainability and creating homes that will benefit their local communities for generations to come. Our ethical and Shariah-compliant investment opportunities, in partnership with Amanah Advisors, are launching soon. Contact Investor Services on 0203 858 9881or email investor.services@acornpg.org to join the waiting list or find out more.

To invest you must be a high net worth individual or a self-certified sophisticated investor. 

YOUR CAPITAL IS AT RISK IF YOU INVEST

Investment opportunities available via Acorn Property Invest are exclusively targeted at exempt investors who are experienced, knowledgeable and sophisticated enough to sufficiently understand the risks involved, and who are able to make their own decisions about suitability of those investment opportunities. All investors should seek an independent professional investment and tax advice before deciding to invest. Any historic performance of investment opportunities is NOT a guide or guarantee for future performance and any projections of future performance are not guaranteed. All investment opportunities available via Acorn Property Invest are NOT regulated by the Financial Conduct Authority (FCA) and you will NOT have access to Financial Services Compensation Scheme (FSCS) and may not have access to the Financial Ombudsman Service (FOS).

The post What is Shariah-compliant investing? appeared first on Acorn Property Invest.

But sales data show the situation is changing. Last year, the average premium for a new-build property compared with an existing home in mainland UK was nearly £74,000, or 29%. This market buoyancy was also underlined by demand for off-plan properties, which rose by 2% to 37% over the same period.

What is behind the increased appeal of new-builds?

In large part, this is being driven by a change in attitudes towards new-builds among buy to let landlords, in response to new legislation on energy efficiency.

It all boils down to Energy Performance Certificate (EPC) ratings. An EPC rating is based on a points system, where every element of a Standard Assessment Procedure (SAP) is added up to give you a total score. For example, to get the gold-standard A rating (92-100 SAP points), a house would need to release minimal carbon emissions into the atmosphere: no gas central heating; low-energy lighting throughout; double- or triple-glazed windows throughout; cavity wall and loft insulation; perhaps even solar panels. There are various ways to boost an SAP rating, such as installing a condensing boiler (around 50 points) or cavity insulation (around 15 points). (But low-energy lighting and double-glazing, perhaps the simplest things for a home-owner to improve, will only give you an uplift of around 6 SAP points in total.)

Before 2018, a property’s EPC rating was unlikely to be a factor in most people’s property searches, which is fortunate since almost 80% of housing in the UK pre-dates the 1990s, when energy efficiency design began to be regulated. In fact, 30% of the UK’s current housing stock was built over 100 years ago, which goes some way to explain why the average energy rating in the UK is D (55-68 SAP points).

Buy to let landlords are driving demand

But in 2018, in anticipation of the Government’s 2050 net-zero target, the MEES (Minimum Energy Efficiency Standard) regulations were introduced. These require all properties that are let or sold in England and Wales, including existing tenancies, to be rated E (39-54 SAP points) or above. The Government is currently considering raising this target to a C (69-80 SAP points) for all new tenancies by 2025 and all existing tenancies by 2028. And there is talk of this being raised still further to a B rating (81-91 SAP points) by 2030.

Given that an EPC rating is only valid for ten years, a buy to let landlord would be well-advised to buy a property that is already C-rated, particularly as the cap on the cost of EPC improvements is widely expected to be raised from £3,500 to £10,000, destroying yields still further. Research supports this, showing that around 50% of buy to let investors bought properties with an EPC rating of A-C in the first two months of 2022, the highest figure ever recorded. For comparison, in 2021 that figure was 39%, and in 2020 just 33%, showing how quickly the new regulations are making an impact.

Homeowners are increasingly choosing new-builds

In the survey of desirable property styles mentioned above, among the preference for period properties Modern/New-build 1990s (15%) and Eco-build 2000s (13%) came in second and third place, suggesting that homebuyers are progressively being drawn to new-build homes. Other research earlier this year also highlighted a marked shift in buyer perceptions of new-builds, with half of those surveyed (50%) saying they would be willing to buy a new-build for their next home, a figure which jumped to nearly two-thirds (65%) among younger buyers (aged 18-34). Nearly 40% of home buyers said they had viewed new-builds as part of the search for the last property they bought.

Energy efficiency is key to new-builds’ appeal

With the rising cost of gas and electricity uppermost in people’s minds, as well as an increased awareness of the part we can all play in reducing carbon emissions, home buyers are starting to factor energy efficiency into their purchasing decisions. Research suggests the main attraction of new-builds is their improved energy efficiency/lower running costs (cited by 74% of respondents). Compared with older properties, new-build properties cost, on average £435 less to run each year, with energy-efficient features coming as standard.

Between October and December 2021, 96% of new-build homes achieved a rating of C or above, with the vast majority (84%) being awarded an A or B. (By contrast, in that same period, only 4% of existing properties achieved an A or B rating, with 81% receiving a rating of C or D and the remaining 15% scoring E, F and G.)

Mortgage lenders also tend to regard new-builds favourably when compared with older homes, because most new homes come with a warranty that should cover the homeowner if anything goes wrong.

The Government is already considering new regulations, as part of its Clean Growth Strategy, which would require all properties to have an EPC rating of C or above. Already, from June 2022, carbon emissions from new-build homes must be around 30% lower than current standards.

Today’s house buyers are planning ahead to the not-too-distant future, when the significant costs of retrofitting an older property are likely to act as a major deterrent to potential purchasers. The alternative – buying an older property and carrying out the work themselves – can run into the tens of thousands of pounds. To future-proof a 3-bedroom house currently rated E could be as much as £100,000 once you factor in the cost of double-glazing, replacing the current boiler with an Air Source Heat Pump, underfloor heating, EV charging points, cavity and loft insulation, low energy lighting, solar panels and making good all the damage to finishes and flooring.

Research suggests that 45% of homeowners have looked into making their property more energy-efficient but have found it too expensive. And given the pace of change in legal requirements, new home buyers want to avoid the risk of replacing what they have currently with an expensive, greener alternative, only to find that in ten years’ time the technology has moved on and they need to replace it again in order to sell their property.

The housing shortage is also driving demand and premiums

In the meantime, the UK is still facing a significant housing shortage. The Government is trying to address this with a target of 340,000 new homes per year, as well as an incentive scheme to encourage the regeneration of brownfield sites, and its Building Better, Building Beautiful Commission to “champion beauty in the built environment”. Nevertheless, the gap between the number of homes required and those being built is barely narrowing each year.

Sustainably-constructed new-builds are emerging as the home of choice for many buyers, with energy-efficient designs offering light-filled, open-plan living and plenty of outdoor space. Demand is expected to grow strongly in coming years, and this is likely to translate into even higher premiums for new-builds. Smart property investors should be looking at housebuilders that are capable of delivering to this market.

Acorn offers buy to let landlords a simpler and more cost-effective way of generating a regular income. Our Acorn Green 1-, 3- and 5-year products provide fixed-rate, quarterly income with favourable yields when compared with investing in an underlying asset. All Acorn developments are built with a focus on sustainability, and we have been one step ahead of Government regulations on energy efficiency for 15 years. From summer 2023 all our new-build homes will no longer use gas and be operationally zero carbon, with an EPC A rating.

For more information on Acorn’s new-build developments please visit www.acornpropertygroup.org

For more information on Acorn’s current investment opportunities please visit www.acornpropertyinvest.com

YOUR CAPITAL IS AT RISK IF YOU INVEST

Investment opportunities available via Acorn Property Invest are exclusively targeted at exempt investors who are experienced, knowledgeable and sophisticated enough to sufficiently understand the risks involved, and who are able to make their own decisions about suitability of those investment opportunities. All investors should seek an independent professional investment and tax advice before deciding to invest. Any historic performance of investment opportunities is NOT a guide or guarantee for future performance and any projections of future performance are not guaranteed. All investment opportunities available via Acorn Property Invest are NOT regulated by the Financial Conduct Authority (FCA) and you will NOT have access to Financial Services Compensation Scheme (FSCS) and may not have access to the Financial Ombudsman Service (FOS).

The post Why smart property investors should choose new-builds appeared first on Acorn Property Invest.

I’ve been with the company for almost 20 years. I started out as a funding assistant and development manager, which harnessed my previous experience in estate agency and banking. My role was to manage new projects from inception through to sales of the end product. I’ve been in my current role for ten years, focusing on procuring and managing funding for all Acorn site purchases and their development. I’ve raised funding for a wide range of different projects across London and the South West, from house conversions to large mixed-use schemes that include affordable housing and commercial property.

Q: How has the company changed during that time?

When I joined there were 20 of us in the London office. Since then we’ve opened offices in Newquay in 2006, Bristol in 2012, Cardiff in 2013 and Exeter in 2017 and now have a team of over 140. In 2019 we launched Acorn Property Invest to widen investor access to our schemes and help Acorn grow our business. Then in 2021, we created Acorn Green to reflect our commitment to working towards making truly sustainable homes with lower running costs and lower carbon emissions.

Q: What is your role in relation to Acorn Property Invest?

For Acorn Property Invest my day-to-day role involves working with our Finance and Land teams to determine the best funding structure for each project. We look at a range of commercial decisions, such as the likely duration of any elements requiring funding, before deciding whether the mezzanine finance should come via Acorn Property Invest and if so, whether it should come from investors in our fixed-income portfolio or directly from investors in the project.

I also assist our many joint venture partners in raising finance. The majority of our joint venture partners are the landowners themselves. By delivering projects, and providing the equity and funding necessary to do so, we enable them to get the best possible return from their assets. I also manage a number of joint ventures with banks and High Net Worth Individuals, which allows Acorn to take on larger sites and spread our financial risk.

When we decide to raise mezzanine finance via Acorn Property Invest we take into consideration our required margin, the type of security (such as redeemable shares), and the type or location of the properties being built, to ensure the rate of return and profit share on offer are both competitive and achievable. The rates we offer investors generally reflect the Loan-to-value and security available.

Q: What are the biggest challenges for Acorn in the coming years?

It’s a very interesting and exciting, but also a very challenging time to be a housebuilder. One of the biggest obstacles we face is the fact that our local and national planning system is overly complex and uncoordinated. This makes it very difficult for us to deliver the number of homes we would like and causes significant delays. It is frustrating, particularly as there is such an acute shortage of housing in this country.

Rising costs and a shortage of skilled labour are also major issues facing all sectors of the industry. Although this makes it hard to predict build costs over a typical, four-year project lifecycle, our experienced, direct construction teams in each region protect the business from many of these disruptions. In the last 3-4 years some significant macro-economic issues, notably Brexit and Covid-19, have had a huge knock-on effect on housebuilders. But despite this slowing our growth plans and creating short-term losses we’ve continued to build our portfolio of exceptional sites, and our losses have been more than offset by the increase in value of our coastal and rural South West developments.

While rising inflation and interest rates are causing some uncertainty, we feel we’re past the worst effects of Brexit and the pandemic, and the next few years will prove very profitable.

Q: And what are the biggest opportunities?

One of the biggest challenges, and also the biggest opportunities, is sustainability. The Government has introduced some tough new regulations for housebuilders as it tries to meet its 2050 net-zero target. We know that awareness of energy efficiency is rising rapidly among house buyers, and we’re expecting this to accelerate further over the coming decade. Acorn have been focused on sustainability since we installed our first ground source heat pump 15 years ago. We are constantly striving to introduce new technologies and modern construction methods that will create truly sustainable homes with lower running costs and lower carbon emissions.

A key part of our ethos is to be a positive force for change, building homes and open spaces that benefit their environment and their community. As part of this, we try and incorporate new public realm, new squares and park areas into our designs, adding biodiversity and repurposing our heritage building stock wherever possible. This sets us apart from many housebuilders and is increasingly valued both by local authorities and house buyers.

Covid-19 accelerated some societal changes that have had a direct, positive effect on our markets. The ‘race for space’, heightened by the Stamp Duty holiday, led to a huge increase in demand for our rural and coastal homes in the South West, which cater for the lifestyle changes that so many new homeowners are seeking. Most of our development sites are either coastal or commutable to Bristol, Exeter or Cardiff and are ideally placed to take full advantage of this demand. And the worsening gap between supply and demand in sought-after areas, coupled with population growth, should continue to benefit our development strategy in the longer term.

Meeting the housing needs of an ageing population also presents a significant opportunity for us. Duporth, which provides senior living of the highest standard, is our first Lifetime Living development and we certainly plan to build more of this type of housing.

Q: Why have you launched an IFISA-friendly product?

We decided to launch IFISA peer-to-peer loans because we wanted to offer investors a tax-free way of investing in our developments. We are always looking at new and flexible ways to appeal to investors, both existing and new. IFISAs are becoming increasingly popular as a way of diversifying into property, and peer-to-peer investors are looking for housebuilders with a proven track record, as well as market-beating returns. Many investors are also actively choosing to fund housebuilders with a demonstrable commitment to sustainability, and that is where Acorn comes in.

Q: What other new investment products might Acorn Property Invest consider?

As we have had such a positive response from investors wanting tax-free returns, we’ll be looking at offering more IFISA-friendly peer-to-peer loans. We have a current development pipeline of 2,200 homes, with a gross development value of £1.2 billion, focused on the South West of England so we’ll be offering investors many more redeemable share offers. We’ll also be bringing on stream more portfolio products to appeal to investors looking for income. Our range of investment products is designed to enable investors to build a portfolio of Acorn investments and earn a mix of both capital growth and income, as well as share in our profits.

For more information on Acorn’s IFISA-friendly investment opportunity offering 9%* p.a. over a 2-year term, visit https://www.simplecrowdfunding.co.uk/property/detail/stanbridge-park-sherston. Stanbridge Park is a new-build development of forty-five 2-, 3-, 4- and 5-bedroom houses on the edge of the Cotswolds.

Acorn Property Group is a multi-award-winning independent, sustainable housebuilder, with a 26–year track record and an established presence across the South West of England and South Wales.

YOUR CAPITAL IS AT RISK IF YOU INVEST

Investment opportunities available via Acorn Property Invest are exclusively targeted at exempt investors who are experienced, knowledgeable and sophisticated enough to sufficiently understand the risks involved, and who are able to make their own decisions about suitability of those investment opportunities. All investors should seek an independent professional investment and tax advice before deciding to invest. Any historic performance of investment opportunities is NOT a guide or guarantee for future performance and any projections of future performance are not guaranteed. All investment opportunities available via Acorn Property Invest are NOT regulated by the Financial Conduct Authority (FCA) and you will NOT have access to Financial Services Compensation Scheme (FSCS) and may not have access to the Financial Ombudsman Service (FOS).

The post Interview with Melanie Omirou, Executive Group Managing Director, Acorn Property Group appeared first on Acorn Property Invest.