Mark Homer

1. Mark Homer Rob Moore

2. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable”

3. “The 4 sure fire strategies to supercruise your profits in the new world” • The New Paradigm • The Investors secret weapon • Green and Pleasant returns • Grow up, get lower rates on Pick and Mix finance

4. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” -Great crash of ’08 – 2 main segments -Finance Led, so high LTV worst affected Section 1: The New Paradigm -Different from late 80s – people want to buy! -Bottom end Rents rising strongly

5. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” -Yield explosion -Low end residential outpacing commercial Section 1: The New Paradigm -7% this year, 6.5% next, 5.5% in 2012 (Savills) -Low end of cycle where prices don’t rise as quickly (for now!)

6. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” -Commercial Properties valued on rent -UK private rented sector growth: Europe Section 1: The New Paradigm -Size, imbalance of returns, attractiveness brings -Institutional investors: Banks lending on rent

7. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” -Surveyors instructed this way Section 1: The New Paradigm -What can you do?: - Pick areas with high LTV -Pick the highest yielding properties

8. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” • Inflation now CPI: 4.0%, RPI 5.1% In January • Believable? Section 2: The Investors Secret weapon -Govt using backdoor strategy! 70s? • Helps rental growth • Devalues debt + Drives capital value

9. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” • Less Sellers with equity • Yields will reduce as market grows, pre crunch 3% lower! Section 2: The Investors Secret weapon • Eventually yields will be so high and people • Wake up – yield compression

10. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” • Solution: Lease Options/Long stop • No Deposit, can take old cheap mortgages Section 2: The Investors Secret weapon • Agents full of people who cant/wont sell • Incentivise them with fee over time

11. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” • UK Property Market very focussed on finance • Low rate, normally easily accessible system Section 3: Green and Pleasant returns -High borrowing by world standards • Just behind US

12. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” • Credit Crunch particularly severe here Section 3: Green and Pleasant returns • London recognised as the most attractive European City for Investment (LaSalle Inv Mang), ask Lord Sugar! -Growth post 70s, 80s and 2008 crashes

14. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” -Planning – not in my back yard • Population from 60M to 71M by 2031 Section 3: Green and Pleasant returns • Doomsday book – 1086 • Land was worth around £75k - £1 Trillion today • -over 10% annually! AFTER Inflation

15. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” -Upswing will be greatest in UK • US/Australia too much building land Section 3: Green and Pleasant returns • Europe rents -Build costs rising – wiring quote! Ged materials

16. Land value?

17. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” -Avg 3 bed 1000 sq ft house £80k plus to build! • Weak Sterling drives building costs on imports + Local materials pushed abroad Section 3: Green and Pleasant returns • Developers build less houses if no profit • -Barker report ‘03 around 230k new homes needed

18. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” • -Yr to June 2010 around 100k completions (CLG) Section 3: Green and Pleasant returns

19. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” • Relationship based Section 4: Grow up and get lower rates on Pick and Mix finance • Little by little – rent stress eases/interest only • -Remortgage straight away

20. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” • Short Leases, Title defects, owned for short period • No CML Section 4: Grow up and get lower rates on Pick and Mix finance • 2.5%-3% over base! Who? • Lloyds – 70% LTV, around 3% over base.

21. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” • Barclays – Interest only lower rent stress • Unlikely CO-OP! Section 4: Grow up and get lower rates on Pick and Mix finance • Santander, Butterworths, Adam Bank, • Aldermore great for HMO (value on rent) • Not RBS!

22. The credit committee

23. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” • HOW? • Need a business Plan – credit committee Section 4: Grow up and get lower rates on Pick and Mix finance • Demonstrate knowledge (bus manager likely to know less than you about residential property!) • Wet their appetite – lots to refinance

24. “The unsheathed truth behind UK property economics and why supercharged returns are inevitable” • Show some income Section 4: Grow up and get lower rates on Pick and Mix finance • Credit history not important to some