From April 2020 the rules for engaging individuals through personal service companies are changing. The responsibility for determining whether the off-payroll working rules (sometimes known as IR35) apply will move to the organisation receiving an individual’s services.

New minimum wage rates that will apply from the 6th April 2020. 

Moving forward, some employers may need to obtain a sponsor licence to recruit the staff they need from abroad. To avoid causing any disruption, especially for key/senior roles, the sooner an employer can get ahead of the process, the better.

Credits: Paida Dube, Employment Solicitor  - DavidsonMorris

Property developers and other professionals in the sector should consider how they can better target the buy to let market to yield greater profits, research suggests. While traditionally families in the UK have aspired to own their property, it seems that an increasing number are content with renting.

According to a survey for insurer Direct Line for Business, 70% of UK renters have no plans to purchase property in the future. Whether the shift in attitudes is due to more families enjoying the flexibility that leasing provides or they feel priced out of the market due to rapid price hikes, it does present an investment opportunity. The sentiment of renters suggests that the UK could be moving towards a housing market that’s similar to Germany’s, where a greater portion of the population chooses to rent.

As you would expect, affordability was a key issue for renters when deciding whether or not they should purchase their own home. But other factors were taken into consideration too, including not being tied to one area and the potential costs that come with maintaining a property, which over a fifth would rather leave to landlords to deal with. The changing attitude to renting means it could be the perfect time to invest in starting or expanding a property portfolio, while developers should focus on homes that will appeal to landlords. 

Despite the opportunities to see growth within the buy to let market, it can be difficult to access the finance that’s needed to grow your portfolio enough to take advantage of the renting market. If your finance is tied up in property and liquidity is a challenge, GIC Capital have some credit solutions that can provide exactly what you need.

Our portfolio builder option, for example, can provide up to 100% of the loan-to-value of the purchase price or open market value so you can invest in the projects you’ve been researching, whether it’s a new build in an up and coming area or a converted flat that will appeal to millennials. The capital allows you to use the value of your other properties to unlock the cash you need to invest in another. It’s perfect for rapidly growing your portfolio. 

Developers with a vision for rental property that will be snapped up can also benefit from our development capital thanks to our network of investors that are looking for the next profitable opportunities. 

It has recently been reported that the affordable home crisis in Ireland has reached breaking point. Some have even speculated that it’s ‘the social issue of our time’ but the sad reality is that the lack of affordable homes isn’t just affecting Ireland; it’s a widespread issue throughout the UK.

What has caused such a crisis?

Recent reports on the UK government’s housing plan between 2015-2020 suggest that almost every target set has been missed thus far, leading some to believe that “by 2020 homeownership will be an 'impossible dream' for those not already on the ladder”. It has been estimated that the need for housing in England alone is currently two to three times higher than  the current supply.

It is thought that the current ‘dysfunctional’ housing market is a direct result of local governments stepping away from the building of new houses, leaving the responsibility in the hands of not-for-profit organisations, which are struggling to provide thanks to a reduction of the capital subsidy.

What is needed?

The country is in need of 200,000 to 300,000 new properties - a margin not seen since the 1970s - which presents a demand for property developers to step in, though some doubt whether building more homes will provide a solution. Property developers face a challenge due to constraints in the planning system, as well as a shortage of available land. Many areas employ strong policies to protect green spaces, which have been highly effective in preventing urban sprawl and, in light of other social challenges, such as climate change and food security, it seems impossible to find a one-size-fits-all solution.

Can the crisis be solved?

However, a solution must come. London Mayor Sadiq Khan is looking to increase the supply of lower-cost homes and has assured property developers that private development proposals that have at least 35% affordable units will be fast tracked through the process by the capital’s council. Whether this scheme will prove effective, or be adopted by other councils throughout the UK is still very much up for debate, but the effects on property developers would be both positive and negative. For developers willing to offer affordable housing, it looks like their schemes will be more strongly favoured by councils, but with some developers unwilling or unable to offer such proposals, it’s clear a compromise will have to be reached somewhere along the line. 

When it comes to buying property one of the key factors that should influence your decisions, is what buyers and tenants are looking for. Keeping this in mind throughout the process, will help you to choose projects that have the potential to deliver the greatest return and market your property effectively.

Commuter links have long been a key factor when deciding on where to live. Nobody wants to sit in rush hour traffic for hours on end or struggle with public transport because of poor links. From getting to the closest shopping destination with ease to visiting family, transport networks are essential for both buyers and renters. However, its links to work that consumers are most concerned with.

Research from AA Mortgages revealed that a change of job was the biggest reason for Brits deciding to move home, significantly surpassing making a profit from the housing market. For almost a quarter (23%) a new job was the catalyst for searching for a new property to buy, it’s likely that a similar factor drives renters too.

So, what does this mean for property developers and landlords?

Homeowners willing to move for their new job will want the easiest possible commute to work while still living in a desirable area. It’s a factor that should be taken into consideration when looking where to invest your money. Ask yourself what companies are there close by, how far is the property from the train station, whether it’s well connected to a motorway, and other transport questions.

Looking at the opportunities within a local area should be a step you take too. For example, if a big company announces it’ll be relocating its headquarters, it could be larger profits to snap up properties that will appeal to workers taking those new positions that are about to be created or relocating to continue in their current role.

With work a key factor in the moving decision for many homebuyers, it highlights just how important it is to mention the attractive qualities of your project in terms of commuting in your listing. Mentioning excellent train links to a nearby city or a double driveway and easy access to the motorway could be just what you need to encourage potential buyers to view your property for themselves.

.

Investing with a consideration for more than just profit has been a growing trend over the last decade in the UK and globally. Now the government is stepping up to further strengthen the culture of social impact investment and for businesses that have a positive social impact with their operations, it could represent a capital boost. 

Impact investment doesn’t mean forgoing profit. It simply means combining profit with having a positive impact on some aspect of society or the environment. It could mean supporting businesses that work to bring educational projects to life in local communities or backing a firm that’s pioneering the way with sustainable energy solutions. Impact investment is all about achieving a double bottom line – generating profit while doing good too.

In the last decade, social impact investment has grown hugely. It started as a niche idea but it’s one that’s grown as more investors are keen to see their money have a positive impact, whether they have thousands invested through funds or a small pension pot. It’s led to institutional investors, pension funds, and more getting on board with the ethos. According to statistics from Big Society Capital, the social investment market in the UK alone was worth £2 billion at the end of 2016, a 30% increase on the previous year.

So, what it the government’s initiative? The social impact investment drive aims to bring social impact investment into the mainstream. Working across five key recommendations, the goal of the drive is to make it easier for people to invest their money in the issues they care about, whether that’s healthcare, education, affordable housing, community projects, or any other social issue. Core to growing the social impact investment market is the government’s commitment to working with the wider financial industry, using the skills and experience of the sector to push plans ahead.

It could soon be standard to invest in a way that addresses modern social challenges while still generating a financial return.

What does it mean for businesses?

For businesses that have a social mission, the drive could represent an opportunity to tap into more investment and access further financial support. Being a social business doesn’t mean that you don’t generate a profit. They still operate in the same way as a normal business would, they simply promote social and environmental responsibility. If you’re a property developer that’s pushing boundaries with creating affordable housing in disadvantaged areas or you’re offering exceptional standard care service to meet the growing demand of an ageing population, for example, you could benefit from the focus on social impact investment. 

Figures from the Bank of England reveal that the number of new mortgage commitments agreed by lenders fell to a two year low during the first quarter of 2018. The number of advances has also fallen, signalling that there’s a fall in property demand across the UK.

The value of new mortgage commitments during the first three months of 2018 fell by 5.9% when compared to the previous quarter, at £6.1 billion. The number of advances fell further still by 9.6% to £62.4 billion. The fall has been fuelled by a lack of first time buyers, which accounted for less than a fifth of agreed mortgages over the period. The fall in agreed mortgages coincided with a rise in reportages, which increased by 3.2% to reach 32.9%.

The statistics indicate a lack of consumer confidence which has been tied to the ongoing uncertainty related to Brexit and what it will mean for the wider economy. As a result, many potential first time buyers and movers are choosing to bide their time. Depending on the outcome of the Brexit negotiations, it could mean a stagnation or surge when the Brexit deadline comes around next year.

What can property businesses do?

With the number of agreed falling, it could represent a challenge for property businesses in the selling market but there are some steps that can be taken to reduce the risk and ensure profit continues to come in.

• Identify property hotspots – There are some areas of the country that are experiencing rapidly rising property prices, reflecting strong demand. If you’re looking to make a new investment now, it pays to know where the up and coming areas are.
• Consider letting – With news that 70% of tenants aren’t looking to buy, the letting market has the potential to keep offering lucrative profits. Student cities, in particular, are great options for reliable returns.
• Keep in mind key features – If you need to sell a property now, keep in mind the top features that homeowners look for. Some can be added to your space, such as fireplaces, to make them more attractive. Be sure to highlight the features that your property does possess clearly in the descriptions and photographs.
• Wait for the market to recover – While a fall in the number of agreed mortgages might mean that demand is temporarily less, the property market has proven numerous times that it’s able to recover. Sometimes simply waiting for the right offer to come along is the best option.  

Whether you want to invest in your next land development project or rapidly expand your letting portfolio, get in touch with GIC Capital – we have the means to provide you with attractive, flexible finance options. 

Any businesses with ambitions for growth can recognise the benefits of reaching out to new markets. As more UK SMEs look to shore up their growth plans by looking across international borders, what’s driving the trend?

SMEs across a wide variety of sectors are eyeing business growth by expanding their customer base through establishing connections overseas. It’s not only set to give them a chance to export to new markets but could help them reduce costs by working with new suppliers and give them access to a whole new talent pool. With so much gloom and uncertainty around the UK economy, the optimism of SMEs might seem surprising. But there are a number of different factors influencing the shift.

Brexit put a spotlight on international trade

While Brexit has led to uncertainty on export opportunities with other members of the bloc, it’s also highlighted just how important international trade is to SMEs. At the moment, only around one in five SMEs export, with the EU a trading partner for some 85%. However, with increased awareness of international trade and a need to diversify, more SMEs are exploring the benefits of looking beyond the borders of the UK. 

Awareness that red tape isn’t as bad as feared

One issue that holds SMEs back from taking the plunge into international waters is the fear that the process will be overly complicated, and they’ll face huge amounts of red tape. It’s a process that can actually be fairly straightforward, as more small and medium sized firms try their hand at exporting, it has a knock on effect on awareness.

Growing business confidence

Despite all the uncertainty, overall business confidence is slowly growing, and more firms are planning for growth in the future, which naturally leads to some looking abroad. A recent survey from Lloyds Bank showed that despite an economic slowdown early this year, overall business confidence increased by three points to 35% and over a third of firms expect Brexit to have a positive impact on their business.

Improved technology making communication effortless

Just twenty years ago it would have been hard to imagine how easy it would be to communicate on a global scale. Technology is rapidly coming down in price, making it easier than ever before for UK SMEs to forge effective working relationships with other businesses and customers almost anywhere on the globe. Technology developments are breaking down barriers for international trade.

Here at GIC Capital, we provide practical, flexible financial solutions for SMEs that want to achieve their full potential. If you’ve got ambitions of reaching a whole new market and just need the capital to turn it into reality, contact us today.