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 or need to live - and those that have been built are often low quality, energy inefficient and priced out of reach of those that need them. In addition, housing for those with special needs is often in very short supply, undermining charities’ efforts to provide housing and care for those people.
There are many problems with the market. National housebuilders obtain planning permissions on large swathes of greenfield land but only release the land slowly, building substantial land banks to bolster future profits. They don't tend to build smaller schemes on smaller infill sites nearer to infrastructure such as schools and shops either, where many people want to live. We’ve all also seen the complaints from buyers over the build quality of some national builders and more recently also the leasehold houses scandal. Big property funds are building and managing institutionally controlled residential luxury tower blocks in most large cities with high rents, not aimed at the mass market. buy-to-let lenders don’t permit long leases to anyone who needs certainty of housing, including charities looking for homes for all the people they support. Smaller housebuilders, who could build smaller developments closer to where people want to live have nearly been squashed out of existence by combinations of financial crises and banking policies - down from 25,000 of them a few decades ago to around just 2,500 today. And then individuals trying to get permission to build their own home encounter a huge shortage of plots and even if they find one, they then encounter the tortuous planning system and most fail at one of these hurdles. These represent a few of the challenges in the housing market today but we know that there are solutions that, over time, will make a difference.
Our sister company and a leading peer to peer lender, Assetz Capital, is looking to reverse the trend of reducing SME house builder numbers by helping people like you lend money to these smaller housebuilders as part of its £1bn+ of loan facilities provided to UK businesses so far in the last few years, and earning their investors over £100m of interest along the way. It has funded around one in twelve of all SME house builder homes over the last two years. And now, Assetz Exchange is looking to bring further solutions to the market.
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 instead of several other reasons including the planning system and limited bank finance for smaller housebuilders. New buy-to-let 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, whilst also being more tax efficient. Solving housing market needs whilst delivering property investor income is why we created Assetz Exchange, to make a positive difference and to help those investors access new markets.
Over the last few decades, government after government has tried, and failed, to create policies that materially improve the housing situation. It’s not necessarily that all 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 influencing those policies is what we will continue to do - but we must accept that waiting for someone else to solve the problem isn’t working. 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 help deliver far more housing plots for people who want the choice to design their own high-quality eco-home with low running costs, and not just be forced to buy one from a large-scale house builder. We will also help bring existing tenanted, landlord-held housing back to homeownership over time. And finally and very importantly, we will help deliver a lot more housing to those with special housing needs, letting you fund this worthy cause and giving the charities and housing associations in many sectors far more housing to fulfil the demand for their services.
For investors there is the double satisfaction of earning a healthy return on capital as well as solving problems in society. We may be alright with our housing but what about our children? Individually the impact won’t be much, but together we can make a real difference. Our platform will make it possible for everyone to take part, regardless of their investment level, democratising property investment and delivering much needed housing to the most needy sectors as well as making healthy returns in a world of low interest rates.
Saving for retirement and producing a healthy income from your savings is far more difficult nowadays than it used to be. It’s not just the global financial crisis ten years ago that created this problem - as pensions were disappointing long 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 in the Assetz group of companies.
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.
Assetz Exchange is now here to offer a much longer range of investment timeframes from one year to twenty-five years. You could choose to invest in a housing scheme providing live in care accommodation to a group of young people with learning difficulties or housing to help ex-prisoners return into society. Or you could carry out shorter term investments by funding the servicing of house building plots to make it easier for self-builders and custom builders to buy a plot on which to build their ideal low energy home. 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 offering long-term secure tenancies. And you will be able to help smaller housebuilders fund their show homes, freeing up their capital to build more homes whilst leasing those show homes back to them over the lifetime of the site.
You can earn well from doing good - ESG (Environmental, Social, Governance) and social impact property investment is now here for everyone and we are here to help you do that good, whilst making a much-needed income. You could even give some of that back if you wish too!
That’s what Assetz Exchange is about, providing significant help in solving the housing crisis, by bringing more property onto the market where it’s needed.
Help us fulfil our mission together and let’s 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