jlend
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Post by jlend on Mar 12, 2018 12:37:27 GMT
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Post by mrclondon on Mar 13, 2018 12:23:10 GMT
An important subject, but one with two sides to the coin, as without off plan "deposits" from far east investors the vast Nine Elms / Battersea development in London would never have happened. Some would argue that it might have been better not to have embarked on such a vast project which was inevitabley going to result in a glut of properties coming onto the market, but the additional funds for development above the "deposits" was forthcoming as (in time) there will be demand to see the properties occupied. There always will be in inner London.
Where the water gets muddied is in the case of secondary cities (e.g. Liverpool that the Guardian is focussing on) where its hard to understand where the demand for ever more city centre apartments will come from. If we assume that off plan deposits can only ever fund part of the development costs, then as well as a supply of gullible off plan investors (Liverpool is highly regarded in far east due to the Beatles effect) you need a source of gullible top up development finance. Yep, thats increasingly likely to be you and me providing the finance via p2p.
Many of the student developments developed with "deposits" + p2p are in convenient locations near established uni's and can't fail to achieve close to 100% occupancy. But as we've seen from the AC Ipswich property, the operating margins are paper thin. Factor in a less convenient location and a less prestigous uni, and it may be your student room that has a void for an entire academic year. Then there is the MT scottish language school ... I remain lost for words with this one.
The sra warning to solicitors is interesting, and probably goes some way to explain the low / slow conversion of reservations to exchanges on some of these developments.
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jlend
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Post by jlend on Mar 13, 2018 12:59:13 GMT
An important subject, but one with two sides to the coin, as without off plan "deposits" from far east investors the vast Nine Elms / Battersea development in London would never have happened. Some would argue that it might have been better not to have embarked on such a vast project which was inevitabley going to result in a glut of properties coming onto the market, but the additional funds for development above the "deposits" was forthcoming as (in time) there will be demand to see the properties occupied. There always will be in inner London. Where the water gets muddied is in the case of secondary cities (e.g. Liverpool that the Guardian is focussing on) where its hard to understand where the demand for ever more city centre apartments will come from. If we assume that off plan deposits can only ever fund part of the development costs, then as well as a supply of gullible off plan investors (Liverpool is highly regarded in far east due to the Beatles effect) you need a source of gullible top up development finance. Yep, thats increasingly likely to be you and me providing the finance via p2p. Many of the student developments developed with "deposits" + p2p are in convenient locations near established uni's and can't fail to achieve close to 100% occupancy. But as we've seen from the AC Ipswich property, the operating margins are paper thin. Factor in a less convenient location and a less prestigous uni, and it may be your student room that has a void for an entire academic year. Then there is the MT scottish language school ... I remain lost for words with this one. The sra warning to solicitors is interesting, and probably goes some way to explain the low / slow conversion of reservations to exchanges on some of these developments. Agree. The interest rates on p2p for some of these developments are high but so is the risk, even with what looks like a high LTV. I've invested in this www.unitestudents.com lot for some exposure to student accommodation and this lot www.placesforpeople.co.uk for some exposure to appartments via corporate bonds.
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ton27
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Post by ton27 on Mar 13, 2018 18:21:13 GMT
An important subject, but one with two sides to the coin, as without off plan "deposits" from far east investors the vast Nine Elms / Battersea development in London would never have happened. Some would argue that it might have been better not to have embarked on such a vast project which was inevitabley going to result in a glut of properties coming onto the market, but the additional funds for development above the "deposits" was forthcoming as (in time) there will be demand to see the properties occupied. There always will be in inner London. Where the water gets muddied is in the case of secondary cities (e.g. Liverpool that the Guardian is focussing on) where its hard to understand where the demand for ever more city centre apartments will come from. If we assume that off plan deposits can only ever fund part of the development costs, then as well as a supply of gullible off plan investors (Liverpool is highly regarded in far east due to the Beatles effect) you need a source of gullible top up development finance. Yep, thats increasingly likely to be you and me providing the finance via p2p. Many of the student developments developed with "deposits" + p2p are in convenient locations near established uni's and can't fail to achieve close to 100% occupancy. But as we've seen from the AC Ipswich property, the operating margins are paper thin. Factor in a less convenient location and a less prestigous uni, and it may be your student room that has a void for an entire academic year. Then there is the MT scottish language school ... I remain lost for words with this one. The sra warning to solicitors is interesting, and probably goes some way to explain the low / slow conversion of reservations to exchanges on some of these developments. I know the AC Loan but not the MT "language school" - can you elaborate?
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Post by mrclondon on Mar 13, 2018 18:29:58 GMT
I know the AC Loan but not the MT "language school" - can you elaborate? See p2pindependentforum.com/thread/9691The borrower's master plan is for the creation of a new residential language school, with the development (and the repayment of the MT loan) predicated on selling the student rooms off plan, leasehold. (Leasehold is not the norm in Scotland, and historically most student rooms come with heritable title - essentially what the rest of us know as freehold).
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ton27
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Post by ton27 on Mar 13, 2018 18:32:51 GMT
Thanks mrclondon- I just realised to which loan you were referring. |
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