We live in a country where more and more of us know that there is something very wrong with our housing market. Not enough houses have been built in the places that we want to live — and those that have been built are often priced out of reach of those that need them.
At the same time landowners and large housebuilders have grown rich getting planning permission on large swathes of greenfield land or building expensive tower blocks of apartments. Now big property funds are getting in on the act and building residential tower blocks in most large cities with even higher rents. Smaller housebuilders, who could build smaller developments closer to where people want to live have nearly been squashed out of existence by combinations of government policies, financial crises and banking policies — down from 25,000 of them a few decades ago to around just 2,500 today.
Another one of our businesses, our sister company Assetz Capital and a leading peer to peer lender, is looking to reverse that trend by helping people like you lend money to these smaller housebuilders as part of its £900m+ of loan facilities provided to UK businesses so far in the last five years and earning their investors approaching £100m of interest along the way. And now, Assetz Exchange is looking to apply more help to finding the solutions by acquiring and building new property to rent and to sell to homebuyers.
In recent years, regardless of the huge numbers of new properties built and brought to the market using buy-to-let investors' capital, buy-to-let has become a scapegoat for the housing crisis. New taxes have weakened the help that it can provide to people's retirement plans and public opinion has decided that in its old form it is no longer as welcome as it used to be. I agree that there is now a need to change and evolve the older and simpler buy-to-let model into something better aimed at today's problems, while being more tax efficient too. That is why we created Assetz Exchange..
Over the last few decades, government after government has tried, and failed, to create policies that actually materially improve the housing situation. It's not necessarily that all of those policies would never have worked, but more that they needed executing on the ground, well and at scale. My involvement in Housing Supply Challenger workshops at No.10 and contribution to the thinking on HM Treasury's design of the New Buy Guarantee (later Help to Buy) mortgage products has helped create some of those policies but it doesn't feel enough.
Working alongside government policy and continuing to influence those policies is what we will continue to do - but we must all say 'no' now to waiting for someone else to solve the problem. Instead, we will facilitate you, the people of this country, to help solve the problem. We will help you target your money at bringing new housing onto the market for rent or for sale, as appropriate to local market conditions and demand over time. We will also help existing tenanted, landlord-held housing be acquired, improved, rented and brought back to homeowners over time.
Many people also have other challenges to deal with as well as housing. Saving for retirement and producing a healthy income from your savings are both far more difficult nowadays than they used to be. It's not just the global financial crisis ten years ago that created this problem — as pensions were disappointing a decade or more before that — but nonetheless it contributed to the general downtrend and despondency of people over their pension savings and general financial wellbeing. I spend a lot of my time thinking about how the wider picture might work better if only there was some joined up thinking. Well, that joined up thinking is now here.
Assetz Capital already provides investors with healthy target interest rates from its property secured business lending and was designed for people with shorter-term investment horizons. It is helping bring back the smaller housebuilder to the UK by providing funding for new housing when banks aren't interested. It also funds all sorts of other trading businesses and provided 40% again of the new money that all the UK banks lent to SMEs in the 12 months to June 2018. It is having a real effect now on the growth of small business in the UK.
Assetz Exchange is now here to offer a much wider range of investment timeframes from one year to twenty five years. You could choose to invest in a housing development that could be held for the long term and delivering much needed rental housing into an area and also much needed income along the way for those investors who funded it. Or you could carry out shorter term investments by funding construction of new housing by purchasing developments from developers for rent and/or onward sale to homebuyers according to market demand. You will also be able to choose to not only fund normal market price properties but also properties with affordable rents, properties with affordable prices for sale and properties with long-term secure tenancies or for people with special needs. You can earn from doing good - entrepreneurial philanthropy is now here for everyone and we are here to help you do good with your money whilst making a much needed return.
That's what Assetz Exchange is about, providing a significant contribution to the solving of the housing crisis, by bringing more property onto the market, whether for rent or for sale.
Join us in the revolution and let's help solve the housing crisis. It won’t be a quick fix but the journey will be rewarding for everyone.
Stuart Law, Chairman, Assetz Exchange Ltd