5 January, 2021
One of our key focuses at MSP is to build on our existing activity in Oxford, we feel it’s a natural progression for us and an exciting growth market to focus on in 2021.
Say the word: ‘Oxford’ and it conjures up a different image for everyone. Historic architecture meets world-class innovation, classic odes combine with fresh rituals and viewpoints. It’s a city of contrasts surrounded by an air of opportunity. Especially for developers.
After completing a successful project just outside the city with one of our valued clients, it seems like such a natural progression for us to extend the MSP experience on a wider scale and we’re excited to pursue this further in 2021 …
Why does Oxford feel like a natural progression for MSP, now more than ever before?
Despite the marketplace for apartments still being strong, one aspect of living that Covid-19 has flagged up is the need for space at home, both indoor and outdoor. The country has seen a rise in larger houses being bought to suit couples and families in the instance of another lockdown. The land surrounding any commuter belt city or town is always in strong demand and Oxford, with its quick links to London has always been on our radar as it’s also not a million miles away from our base in Dorset.
This proximity is essential; as many of you already know, we love taking a hands-on approach with our clients, we always show a keen interest in each and every development by undertaking regular site visits. It’s through doing this that both parties know that our goals are perfectly aligned to ensure that the property they want to build comes to life. We’ve seen the value of this time and again by merging our experience with each respective client’s goals, we can predict, prevent and navigate our way around potential issues that may arise, as well as assist in spotting potential opportunities that can be maximised.
We pride ourselves on building a core team of experts that can be on hand to advise at any given moment, so by further enhancing our current activities in well-established key locations, we can continue to develop our relationships with existing borrowers and professionals and forge contacts with new clients, solicitors, accountants and brokers. This in itself opens up a wide level of new opportunities, the benefits of which we can pass on to our clients.
This worked seamlessly with one of our valued clients, Lynda King, and her company By Degrees 2 Ltd. Read here to find out how our assistance stepped in when her finance provider ceased trading and our appetite to lend secured the development and completion of three individual family homes in 2020.
With the market moving forwards in a strong manner; people still capitalising on the Government’s momentary ban on Stamp Duty and developers looking to provide new homes that meet the current demand within Rishi Sunak’s provisions of new homes within the next three years now is the time to extend horizons and take the MSP experience to a wider level.
So why Oxford? Let’s dig deeper into why this city should be a high priority on your list …
The property market in Oxfordshire is underpinned by the City of Oxford with its historic universities, good communication links to London and the Midlands, and within easy access to the picturesque Cotswolds.
The average price for property in Oxford stood at £518,284 in December 2020. This is a rise of 2.47% in the last three months (since September 2020) and a rise of 9.74% in the last 12 months. In terms of property types, flats in Oxford sold for an average of £334,789 and terraced houses for £469,301 (Zoopla).
Oxford also has a broad economic base with strengths in motor manufacturing, education, publishing, and a large number of information technology and science-based businesses.
Dig deeper and you can see that the Oxford investment property market is thriving and varied. Over in East Oxford, the student-let market is strong, with many Victorian terraced houses off the Cowley Road in continual occupation. North Oxford is historically wealthier, with many large single-family houses and when you look to the suburbs and surrounding villages, you again see room for growth, expansion, and impact in a vibrant and buzzing part of the country.
With stringent planning permissions in place to ensure that the city grows in a manner that honours its past, MSP Capital is positioned perfectly to execute and deliver strategic finance solutions to ensure that visions and ambitions can be brought to life.
If you’re considering your next steps for 2021 feel free to give us a call to talk through ideas in Oxford and the south. We’re here with an appetite to lend and a solution-focused mind to ensure you make the most from your future investment.
5 January, 2021
Oxfordshire based developer Lynda King and her company By Degrees 2 Ltd have been undertaking residential developments for a number of years, most recently, the build of new, large detached houses in the village of Frilford near Abingdon.
The first phase of the development was funded by Amicus, however, following their demise, Lynda was left searching for a new funder to assist quickly with the final three units that comprised phase two of the scheme.
Our team at MSP demonstrated an early willingness to step in and after discussions with a number of lenders, Lynda chose MSP thanks to our flexible approach and ability to turnaround the funding swiftly. This resulted in a near £3m funding package, agreed in July 2019.
Despite the issues faced in 2020 with Covid-19, Lynda’s project has progressed smoothly, with Lynda undertaking the work on a self-procured basis and is very much hands-on herself. The high-quality nature of the scheme was rewarded with an early sale, secured before the development was completed.
Due to this, we were able to allow an element of cash release from the first sale, and with the development having just reached practical completion, we have now rolled the entire facility into our Premium Bridge option to fund the sales process of the final two units.
MSP’s entire team understood the challenges and what we needed as a business and have been the supportive funder we were seeking. They stepped in to fund the final three houses of our project in Frilford at a difficult time following the closure of Amicus. Their ongoing flexibility when we sold the first unit has also been much appreciated and it was great to be able to continue our relationship by switching the funding into a lower-priced Bridging Loan as we reached practical completion.
Lynda King, By Degrees 2 Ltd
It’s January, the start of another year, unusual as it might be already, it is still ripe with opportunities. Yet as Britain heads into another full-scale lockdown, we’re in a very different position property wise to that of this time last year.
So far, the government has maintained that the 31 March 2021 will be the official end of the Stamp Duty Land Tax (SDLT) holiday, with no plans to extend it at this time. There are though loud calls from within the property industry for the SDLT holiday to be extended for a further six months. Whether the government listens will remain to be seen, but it’s clear that there’s an ever increasing pressure on lenders, surveyors, conveyancers and estate agents to complete purchases within the little time there is left.
Stamp duty holiday: how it works
As you may recall, going back to July 2020, the government announced that it would raise the threshold for paying stamp duty on property purchases from £125,000 to £500,000 in England and Northern Ireland. The SDLT holiday thus means that buyers of homes of up to a value of £500,000 pay no stamp duty, with a reduced rate for homes above that. So for example, someone buying a £500,000 property who achieve a saving of £15,000.
The SDLT holiday is also open to landlords and investors, although they do still have to pay the standard 3% surcharge for a second home purchase.
What effect have we seen from the Stamp Duty Holiday?
When chancellor Rishi Sunak made the announcement on the SDLT holiday back in July, it was at a time of huge economic uncertainty as a result of the COVID pandemic starting to take its toll. What the SDLT holiday has achieved is to help fuel a mini-boom in the property market.
As a property lender, we at MSP Capital have certainly bore witness to a rise in sales volumes on completed development stock over Q3 and Q4 of 2020. This would appear to have been primarily driven from those house buyers looking to move to homes with gardens after perhaps being stuck in a flat with either no or very limited outside space during lockdown. Given many development sites were severely delayed during the first lockdown, and many development loans needed to be extended to account for these delays, the fact that demand is strong and sales are completing quickly, has certainly been a positive outcome.
There are some within the property industry that wish to raise caution to those desperate to complete their purchase before the deadline on the 31st March. It has been noted that the average residential property price has increased by more than £15,000 since June 2020, thus outweighing the savings available with the SDLT holiday. Indeed, some feel that housing market activity is likely to slow down this year, especially once the SDLT holiday expires. If this is the case, and there is a house price correction, we may find the SDLT ‘savings’ are wiped away if property prices do drop as some fear.
Homebuyers who do though want to take advantage of the SDLT holiday are being encouraged to act quickly, as there are those that are warning that the current high demand for mortgages, coupled with the COVID restrictions we are still facing, are creating delays in the buying process. So with buyers desperate to complete on purchases before 31 March, perhaps bridging finance could become an option to some.