by Beneath one can find our This fall 2023 efficiency announcement. This contains; up to date monetary info on all properties, up to date particular person unit particulars, property disposals, growth loans, dividends and different vital info for buyers.
To make sure that all shoppers have the chance to think about this announcement, the Trade can be suspended as typical, for 3 working days, re-opening at 10am on Monday 5 February 2024.
Vital upcoming dates
| 1 February | 5-year anniversary processes: voting commences |
| 5 February | Dividends for the month of January paid Unit schedule up to date for 31 January 2024 LHX Trade reopens for buying and selling (10am) |
| 15 February | 5-year anniversary processes: votes finish, block-listings begin (11.00am) |
| 29 February | 5-year anniversary processes: block-listings shut (11.00am)February exercise replace printed |
As we speak’s bulletins
1. Portfolio efficiency
2. Dividend distributions
3. LHX Mortgage Bonds
4. February 5-year Anniversary Properties
5. Property growth loans
6. Properties with fireplace issues of safety
7. Upcoming quarterly bulletins
1. Portfolio efficiency
As we speak (31 January 2024) we’ve got printed up to date monetary info for each property, together with web earnings, mortgage particulars and the web money place. You will discover this info on the prime of every property’s respective funding web page, within the ‘Financials’ part.
The ‘Particular person Unit Particulars’ part, a tab inside the ‘Financials’ part on every property’s funding web page which gives detailed info on a unit-by-unit foundation, has additionally been up to date to mirror the most recent standing of each unit and contracted hire for let models. This tab is up to date month-to-month and permits you to monitor gross sales progress for all properties voted on the market as a part of their 5-year anniversary course of.
All info is up to date to 31 December 2023.
Market overview
Since our final quarterly report, the outlook for inflation and rates of interest has modified considerably – inflation has now fallen to 4.0% (CPI) within the 12 months to December 2023 down from 6.7% in September (ONS) and markets are actually pricing in cuts to rates of interest in 2024.
Nonetheless, the broader financial system and housing market has already been considerably impacted by the prevailing excessive charges of curiosity, with many commentators suggesting the UK is already in technical recession (EY) and home costs proceed to be impacted, with additional falls predicted in 2024. The OBR has predicted that home costs will fall by 4.7% in 2024, and up to date ONS information exhibits that UK home costs fell on the quickest fee in additional than a decade in November, with a very sharp decline in London, with a 6% contraction within the 12 months to November. The potential fee reductions on the horizon might be feeding into extra responsive home worth indexes with Halifax exhibiting costs rose by 1.1% in December suggestive of elevated demand, nonetheless they too are predicting a fall between 2 and 4% in 2024, in keeping with different indices.
Housing affordability continues to lead to a lot decreased transaction numbers, with information from HMRC exhibiting that the variety of UK residential transactions in November 2023 was 22% decrease than November 2022. HMRC provisional information is exhibiting that 2023/24 transaction numbers within the monetary 12 months to this point would be the lowest within the final 10 years, bar 2020/21 when the nation was in a protracted interval of lockdown.
The rental market has carried out nicely, and demand for rental properties has been 51% above the 5-year common for many of 2023 (Zoopla), pushed by each a scarcity of rental properties as landlords exit the market and potential patrons keep in rented lodging for longer. This has resulted in robust rental progress, with the typical progress throughout UK non-public rented residential property up 6.2% within the 12 months to the top of December 2023 (ONS Index of Non-public Housing Rental Costs).
5-year anniversary buying and selling
On 1 December 2023 we enabled buying and selling on properties that had been being bought off platform following 5-year anniversary shareholder votes. We are going to proceed to promote these properties (on a unit-by-unit foundation for residential properties (the place relevant) to maximise worth and block foundation for scholar/industrial properties) in keeping with shareholders voting intention. Nonetheless, following investor suggestions, with buyers voicing a need to have the choice to liquidate their holdings in these properties previous to the gross sales course of finishing, we acted to offer another exit possibility.
We obtained a big quantity of constructive suggestions from buyers, each on account of enabling buying and selling itself and on the improved Particular person Unit Element disclosure which offered the mandatory info to commerce – in extra of £500k has been traded since 5-year buying and selling was enabled.
Residential portfolio unit standing
The desk under provides a abstract of unit standing by class throughout the residential portfolio at 31 December 2023. The modifications exhibited over time proceed to focus on the deal with promoting residential models, as we search to repay mortgages and fulfil shareholder mandates to promote properties following their 5-year anniversary votes.
| Residential unit standing | 31 March 2023 | 30 June 2023 | 30 September 2023 | 31 December 2023 |
| Let | 336 | 308 | 267 | 252 |
| To let (vacant) | 10 | 4 | 7 | 6 |
| On the market (vacant) | 52 | 54 | 79 | 49 |
| Underneath provide (vacant) | 44 | 60 | 53 | 77 |
| Whole present models | 442 | 426 | 406 | 384 |
| Bought | 86 | 102 | 122 | 144 |
Rental efficiency
Now we have been proactively finishing up hire opinions throughout the portfolio, resulting in elevated rental efficiency. Throughout 252 tenanted residential models, contracted hire grew by 9.2% within the 12 months to the top of December 2023. By comparability, common rental progress throughout UK non-public rented residential property was 6.2% over the identical interval (ONS Index of Non-public Housing Rental Costs).
Unit gross sales
There have been 22 residential models gross sales accomplished in This fall 2023, amounting to £4.33m in property worth. Throughout these accomplished unit gross sales, gross sales costs had been on common 0.2% above their vacant possession worth (VPV) and 9.5% above their buy worth.
Unit gross sales have accelerated this final quarter and the typical sale worth achieved has moved from just under VPV final quarter to only above this quarter – probably on account of the extra constructive outlook for rates of interest in 2024. Nonetheless, it stays the case that, as we reported in Q2 and Q3 2023, we’re persevering with to expertise agreed gross sales falling by, primarily on account of mortgage affordability and, in keeping with market tendencies, we’re seeing longer than common gross sales durations.
Following the sale of the final remaining unit, Finch Heights, Hastings has been bought off platform – the Firm was positioned into members’ voluntary (solvent) liquidation on 17 January 2024 and the money distribution has been paid to shareholders’ London Home Trade account – offering buyers with a complete return (dividend and web capital) of 38.4%.
Purchasers can see the efficiency of agreed and accomplished gross sales within the Particular person Unit Particulars of every property and on our Promoting Document.
Mortgage debt
Because it stands, the typical rate of interest throughout our mortgaged portfolio stays at 8.2%, which is unaffordable for almost all of residential properties. The price of servicing mortgage debt erodes rental earnings and is the first purpose for dividend suspension throughout the portfolio.
We’re persevering with to pay down mortgage debt wherever potential, predominantly by unit gross sales and £2.9 million of mortgage finance was repaid over the last quarter. The whole portfolio mortgage loan-to-value (LTV) decreased to 44.5% at 31 December 2023, from 47.6% at 30 September 2023.
2. Dividend distributions
There are not any modifications to dividend distributions – 8 properties are distributing dividends and the speed stays unchanged.
The typical web dividend yield on the 8 properties distributing dividends is 4.25%.
3. LHX Mortgage Bonds
Following latest unit gross sales in Mortgage Bond properties throughout This fall, there was partial compensation of capital with curiosity in a single bond and full compensation of capital and curiosity in one other:
- The Backyard Court docket Mortgage Bond has been repaid in full with curiosity. Bondholders achieved an rate of interest of 8.78% p.a. accounting for will increase within the Base Price over the bond’s time period.
- The Dutch Quarter II Mortgage Bond has been partially repaid with professional rata curiosity, equal to an rate of interest of 9.05% p.a. 62% of the mortgage bond stays in place, secured with first authorized cost on the remaining unit with bond buyers persevering with to accrue curiosity at a present fee of 9.25% p.a.
The Mortgage Bonds and their charges are introduced under, however please word the following Financial institution of England base fee choice is arising on 1 February and any change to the bottom fee can be instantly handed immediately on to bondholders, altering the each year rate of interest for every of our Mortgage Bonds:
4. February 5-year Anniversary Properties
4 properties are present process their 5-year anniversary course of in February, with voting commencing on Thursday 1 February:
5. Property growth loans
You will discover the most recent updates on the excellent loans on their respective funding pages right here.
6. Properties with fireplace issues of safety
The UK-wide fireplace security scandal affecting excessive rise blocks continues. We’re working to assist resolve excellent points the place potential and the federal government is continuous to handle the problems throughout the UK, however the state of affairs stays removed from resolved throughout our impacted properties. Our energy to progress the state of affairs is restricted in our capability as a leasehold proprietor of a small variety of flats inside a bigger block, in all excellent circumstances on our platform.
For additional particulars on this and seven properties that stay impacted, learn the most recent replace on every affected property’s Newest Replace part.
7. Upcoming quarterly bulletins
30 April 2024 – market closed from 10 am that day till 10am, 3 Could 2024
31 July 2024 – market closed from 10 am that day till 10am, 5 August 2024
In case you have questions on these bulletins, please electronic mail us at assist@londonhouseexchange.com
Finest needs,
The LHX group
