News Review: Sale and Rent Back


A hard road to a better future by Daniel


Lowerson, partner, DFB Housing Solutions


the comprehensive


Spending review laid out the public spending cuts the government has planned for the coming years. cuts that start in many cases from January 2011. But a survey carried


out by the BBc before that found the majority of people believe that george osborne’ s age of austerity, spending cuts and higher taxes, had already begun. People thought Vat had already increased to 20% - something not due until the start of next year. this raises some worrying questions. do people think that


things aren’ t as bad as predicted and will they have the confidence to spend and drive the economy upwards? or are people so squeezed now that they believe things can only get better? if so


how many are going to be left with nothing in reserve to survive the coming years? the majority of people polled on the subject of cuts do back them. But if they believe the cuts have already happened many will change their opinion when they actually feel their impact. the objective for the


government is clear – reduce the debt and reduce it quickly. a fair objective, but the Bank of england will be left with the unenviable task of trying to rebalance the macro economic and monetary systems. this must include support to the banks only on the condition they in turn support private sector business and the housing market. Both sectors are capable of turning the economy around and driving a sustainable recovery. the coalition has taken the


view that tackling the debt head on will lead to better results in the longer term, avoiding ongoing interest payments that drag like an


ProPerty investors with a conscience


You’ d be forgiven for thinking that the property industry was alive and kicking if you’ d been at October’ s Prop- erty Investor show at London’s Excel centre. Investors came from all over Britain and abroad to see exhibi- tors offering investment options ranging from overseas developments to distressed property selling for below market value. The strong attendance at the show suggests people


still want to invest in property but that appetite will not be met unless it is supported by sustainable, sensibly priced mortgage lending. And sadly, there were very few exhibitors representing the finance sector. As well as the traditional pundits hosting stands at the show, there was noticeably more interest in innova-


18 mortgage introducer NOVEMBER 2010


tive investments offering more than just a solid low risk financial return were high on the agenda. People were looking for investment products that


offered a social return or had strong green credentials and the DFB Property Asset Management fund had a positive reception. This collective fund offers investors a low risk invest-


ment in sale and rent back property that has the social benefit of helping people avoid repossession. Not only does it keep people in their homes and communities it has the wider benefit of preventing the spread of ghost towns, where home after home is boarded up by bailiffs and the value of the remaining homes is driven down, fuelling further repossessions.


anchor on the economy’s progress. a parallel with personal


debt is easy to draw. mortgage and personal debt repayments all too often put an unbearable strain on a household’ s economy and can make people’ s lives a misery. a balance must be


achieved between state, private business and households. osborne said his cuts


were a hard road to a better future. it may be a better future overall but there will be many people who are hit hard by the slashing of public spending. on a household level, sale


and rent back is one way people hit by cuts can take a hard road to a better future. the hard part is selling your home at a discount. But a guaranteed sale, processed quickly, and the ability to remain living in the property with an affordable rent after the sale is a better future than losing the roof over your head.


NEW HOME BUILDING


As part of the Spending Review, local councils have been authorised to cut regional house building targets.


Official estimates suggest that we need two million new homes by 2016 and three million more by 2020 to cope with our increasing population. Not to mention rising number of single person households and people living longer. Think tanks have estimated that cuts could lead to 300,000 planned homes being dropped all around the country. The lack of new homes places an onus on maximising the usage and quality of current housing stock. There are areas where housing has been neglected, and mass repossessions have created ghost towns in some regions.


There are various possible solutions to the problem. Regeneration programmes could be carried out by private sector home builders. Social landlords taking on empty properties are a good way of improving existing housing stock.


There have also been some fantastic local initiatives where residents have built homes themselves in conjunction with various different stakeholders - learning new skills and trades which lead to future employment. What better way to create a “ big society” community?


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