The UK real estate sector is showing signs of recovery, with rent values experiencing sustained growth and presenting growth potential, according to Daniel Austin, CEO and co-founder at ASK Partners.
Commenting on the latest Halifax house price data, which showed a 1.1% year-on-year increase, Austin highlighted the importance of physical condition, location, and age in determining a property’s value.
“Well-maintained properties boasting modern amenities tend to command higher prices, while neglected ones may struggle to attract tenants or investors,” Austin said. “In the current market, the emphasis has shifted towards the importance of location and quality over the yield on debt or cost. We anticipate opportunistic acquisitions of prime properties in prime locations.”
A recent RICS survey revealed that non-traditional market segments, such as aged care facilities, student housing, data centres, and life sciences real estate, are yielding the most robust returns. With housing set to be a key issue in this year’s election, Austin expressed hope for a long-term plan for new homes, including social housing, but expects more short-term fixes.
“Stimulus will be welcome but can create unnecessary froth. For voters, a stamp duty holiday or reprieve may be a welcome sign. For developers, eased planning regulations for brownfield sites and conversions will be popular,” Austin explained. However, the government will be faced with a challenge – striking a balance between trying to increase housing supply and therefore affordability by supporting developers and private landlords but appealing to voters who do not want to see greenfield development.
ASK Partners aims to support the best sites in prime locations as a debt provider with well-capitalised sponsors who understand their product. The company seeks to bolster developers’ initiatives by adopting a flexible underwriting approach while navigating current planning rules and market uncertainty.
This will enable us to continue to offer opportunities for the growing number of private individuals opting to invest in property debt,” Austin concluded.