To What Degree do the Housing Shortage, Home Prices and Rising Rents Extend Beyond London?

Birmingham, Manchester, Glasgow and Leeds are now some of the most expensive cities in which to rent in Europe. Can investors and the Government rein that in?

The year-upon-year of double digit housing price increases in London makes for newspaper headlines around the globe - in part because London has so many non-dom owners of palatial homes and flats who treat these properties as financial instruments. This phenomenon has the unfortunate effect of pushing up home prices and apartment rental rates for middle class people who work in the Capital City.

This is not restricted to London. The shortage of housing exists throughout much of the UK, as recent statistics prove. Home Let, the UK’s largest tenant referencing specialist, identified in the spring of 2015 that UK rental prices in the first quarter of the year rose an annualised rate of 10 per cent nationwide. While London will always skew the national numbers (rent in Greater London averages £1,436), what perhaps is most surprising is that rental rate growth is higher elsewhere. As it turns out, the 2014-2015 rate of rental increases is higher in West Midlands (7.9%), East Anglia (8.4%) and South West (15.5%) as compared to London (7.5%). Close behind London are Scotland (6.2%), Northern Ireland (5.2%) and Yorks & Humber (4.3%). Home Let also emphasizes that rents have risen in all 12 UK regions in the three months to May 2015 compared to 2014.

Why the across-the-boards hikes? The shortage of housing in the UK is no secret. Despite the efforts of strategic land developers - private investors and developers who endeavour to convert unused land to residential development - the country is easily short of one million homes that younger people need to establish families. The charity Shelter advocates for freeing up more land for more development at all price levels as a means to alleviate housing costs at the bottom level. And yet the number of homes built in 2014 was roughly half of the 250,000 dwellings thought to be needed.

What’s new is that the price increases, due to the homes shortages, are being felt in cities north, west and south of the Capital. UK rents are the highest in Western Europe. London is more expensive than everywhere, including Paris, Milan, Nice and Rome. But ranking 6th and 7th in the European list compiled by Easyroommate.co.uk are Birmingham and Manchester, with Glasgow at #9 and Leeds at #11. That’s five UK cities ranked among the Continent’s top dozen.

As a spokesperson for the Association of Residential Letting Agents told the website Property Wire, “It is worrying to see so many agents reporting an increase in the cost of rent over the last six months, especially considering so many people rent as a way to bridge the gap whilst they save to get onto the property ladder.”

To those who engage in real asset portfolio investing, this spells a clear opportunity. With housing so pressing a need it makes sense to buy UK land, get planning authority approvals and then go to work on constructing infrastructure and the dwellings (real asset investors typically transact the land and achieve planning permission, then subsequently sell lots to homebuilders). The stumbling block is planning approvals as local authorities sometimes have to balance development against local citizen sentiments that resist development.

Chancellor George Osborne has stated that opposition to housing effectively means opposition to national economic growth. “Planning freedoms and more houses to buy” is a lynchpin in his blueprint for building a growth economy (“Fixing the foundations: creating a more prosperous nation,” July 2015). He places the importance of affordable housing in the context of enabling workers to adapt to change, and that an effective land and housing market “helps firms to locate where they can be most efficient and create jobs ... enabling people to live and own homes close to where they work,” he writes.

Osborne points out that recent approval process streamlining (e.g., the Localism Act of 2011 and the National Planning Policy Framework) has housing starts now at a seven-year high and that first-time buyers rose by 20 per cent in 2014. Also, the Help to Buy program has enabled 100,000 households to get on the property ladder.

Even with that, however, rental rates continue a rise. It appears as if more must be done and that for investors, the opportunities to build and sell homes and provide rental housing continue to be rich.

Would-be housing investors still need to go about all investing with caution. Whether engaging in strategic land investment or other real asset portfolios, investors are urged to discuss strategies and specific UK property funds with an independent financial advisor.

The Greek Debt Crisis: How Might it Affect UK Real Estate Investments?

The UK’s outsider status relative to the Euro is an advantage. But the crisis has a ripple effect throughout the world, and might indirectly impact British investors.

Investors across the globe are riveted on the near-weekly announcements on the status of the Greek-Eurozone crisis. As well they should: the complex interplay of economies within, without and possibly exiting the European Union are a game of chess taken to a third dimension. The August 2015 bailout deal was the latest pause in the unfolding scenario.

Which begs a question for those investors who put their money into UK joint venture real estate partnerships. Will whatever happens to Greece and the Euro affect us? How might loans, defaults and austerity measures affect the success of a joint venture that is building homes in Peterborough?

The short answer is probably not much. The buyers and builders of luxury homes in Central London might feel an effect, but only very indirectly. It’s well known that wealthy foreigners from China, the Middle East, Russia and elsewhere are in the majority, buying pricey flats and homes in the Capital City. With the rare exception of those who find themselves cash-strapped due to the Greek crisis, it’s unlikely they will reduce their spending in England. The UK is their safe haven, after all, from the volatility and instability their assets are exposed to elsewhere.

Another slight effect on UK housing investments might come because some risk-driven investors see an opportunity in Greece at this moment. A lifestyle reporter at Forbes.com wrote in July that a leading Greek real estate website has seen a curious uptick in interest in Greek properties, likely driven by a 50 per cent drop in prices and 90 per cent drop in transactions since 2007. The web traffic is not from potential Greek buyers but instead from people in other countries that include Russia, Italy, France, Turkey, the US, Australia and Canada. It’s surmised that these are countries with historic associations with Greece and a large population of Greek expats. Perhaps they see a recovery at some point in the future, and they’re willing to buy a bargain that can weather the storms that occur in the short-term. If they are spending their Euros, Dollars or Rubles in Athens, it’s possible they are spending less in London.

Not that the effect is all that noticeable. London’s population, at an all-time high of 8.6 million people, continues to experience double-digit house-price increases in 2015, a multi-year trend.

Nor is the broader UK economy terribly vulnerable. The Bank of England published its biannual Financial Stability Report in July 2015. While vigilant over how a crisis contagion might affect the financial services sector, BoE Governor Mark Carney told The Telegraph, “A series of defences are in place and depending on how events unfold, those may be tested,” he said. “A persistent impact on economic activity [in the UK] is unlikely.” The Telegraph explained that UK bank exposure was at most 1 per cent of the sector’s capital buffers. HSBC is the most exposed of the large lenders, however the others might feel the effects if the crisis were to spread to Germany, France, Italy and other countries where those banks have a greater volume of business.

Perhaps the most vulnerable borrowers who are engaged in real estate investing - buy-to-let landlords - would suffer from a rise in interest rates because many of their loans are interest-only. Those types of mortgage holders account for 18 per cent of the flow of new mortgages; an interest rate rise might overwhelm their property income.

UK capital growth fund investors essentially ride independent of the big banks, putting their money into raw land acquisitions that become residential and commercial properties. Rather than relying on a natural increase in value, these funds target strategic land opportunities where planning authorities can grant a use change. The capital growth then is expedited, even as much-needed new homes are built.

Investors of all stripes should pay attention to the global economy as well as what’s happening in England and in their own portfolios. An independent financial advisor is highly recommended for objective advice on all investment dynamics.

Shortages of Bricks and Bricklayers: Factors that Are Slowing UK House Building

The Great Recession continues to slow England’s return to full home building with limited material and labour capacity. There are creative solutions, however.

There is a multitude of reasons cited for the housing shortage in the UK. One is a shortage of UK land, or more specifically land that is approved for building. Second, the financial crisis of 2008 has residual effects on younger families who have difficulty mustering the required deposit to buy a home. Third, as many as one million British households are waiting for homes that, as of now, do not exist.

But for all the UK land investment groups and Government programmes designed to address these shortages, there are emerging yet other key shortages: there aren’t enough bricks and bricklayers needed to build new homes.

The Guardian reported in April 2015 that, according to the Federation of Master Builders (FMB), “members are already struggling to get the skills and materials they need to meet demand.” And truth be told, while the brick/bricklayer shortage is most critical – an FMB survey found that fully 50 per cent of construction firms report difficulty at recruiting bricklayers in the past year – there is a skills shortage across the building trades: carpenters/joiners, plumbers and HVAC trades, supervisors, site managers, plasterers, roofers and civil engineering operatives are all in short supply.

The industry warned of a skills time bomb during the recession, as hundreds of thousands of workers left their professions simply due to a lack of work. Making things worse, the Construction Industry Training Board (CITB) projects that a significant number of workers, 400,000 people, will retire in the next five years.

From the materials side, the Brick Development Association, the brick makers trade group, says the recession played a role in shortages there as well, as production facilities were mothballed in the years following 2008. Returning those facilities to production takes investment that some plants are unwilling to make without greater certainty about Government supports of the market, say industry officials. Long waiting times and rising prices plague the industry, with 62 per cent of construction companies waiting at least two months for order delivery; some order backlogs are as long as six months. Even with a 17 per cent increase in capacity in 2014, about 20 per cent of the nation’s bricks used were imported from the Netherlands and Belgium.

The problem is more pronounced in some regions than in others. Investors working through real asset management groups factor this into their planning of residential developments, as timing on delivery is a critical component of how their investments perform. There is some indication that national homebuilders have a advantage in that they are able to source skilled labour and building materials faster than smaller construction firms.

One solution that could be a real asset in the national campaign to add to the housing stock might be found in modular housing. Built off-site and delivered by lorry to the home site, modular buildings offer faster construction and therefore a faster return on investment to investors and managers. Because modules are manufactured indoors weather is removed as a factor, as is the risk of mould, mildew and rust. Modular homes are judged to be greener due to less waste in materials and less site disturbance where assembled, and are reportedly less expensive to build as compared to traditional building methods. Modular homes are made of wood frame walls, floors and roofs, sometimes with brick or stone exteriors. The method is used for private house building, housing associations, student accommodations, residential care homes, hotels, disaster relief accommodation and holiday homes, however about 80 per cent of London’s highest structure, The Shard, was built off-site using similar methodology. Only about 20 modular home manufacturers currently exist in the UK.

So as England deals with its shortages of homes, the supply chain and asset management of money, land, materials and labour, all such factors play a role in helping alleviate the shortage. Given the promises of politicians of all stripes in the 2015 election, land investment groups as well as the Government have a good amount of incentive to put every tool to work as soon as possible.

That stated, all investments should be approached with objectivity. Speak first with an independent financial advisor about your interest in housing, land and related assets.

Homes Near Good Schools More Valuable: UK Infrastructure Matters

The fluidity of Britain’s renter population reveals the importance of outstanding schools. Investors in all types of residential property take note.

What’s driving up the rent in parts of England? Is it the shortage of quality rental housing? Or the increase in the UK population overall? Is it the fact that fewer people own their homes today and by default have become renters?

It’s each of those things plus one more: it’s the quality of the schools. According to the UK Office for Standards in Education, Children’s Services and Skills - OFSTED - properties located nearest schools with outstanding ratings have seen a dramatic uptick in families in the seven years since the financial crisis of 2008. The broader takeaway for investors in housing development - including those engaged in UK land investing - is that proximity to quality free schools will increase the value of those properties for both rental and for sale dwellings.

In the past, prior to the recession, singles and couples without children largely rented properties nearest schools, even those that were considered some of the UK’s best educational establishments. According to Countrywide PLC statistics, only 9 per cent of rental homes had school age children near schools in 2007. But that number jumped to 28 per cent by 2015, which the lender says is due to the growing number of families living in the private rented sector (i.e., fewer young families own their homes).

Of course what’s popular with renters is quite likely also popular with homeowners. So it’s a fair assumption that, regardless of whether a family owns or rents their home, they will prefer properties nearest the schools they prefer as well. This is worth noting for investors who weigh working with different capital growth properties: schools, among all types of infrastructure, matter.

Other factors found in the Countrywide quarterly lettings index:

• Tenants living within a kilometre of a school that is rated outstanding pay 14 per cent more in rent than at properties more than a kilometre distant from the school. Builders of rental properties should scout land near the best schools for investing, perhaps.

• Tenants renting three and four bedroom flats pay an even higher premium, about 16 per cent. Instances are cited where identical homes across the street from each other let for 15 to 20 per cent more because of school quality in their catchment area.

• The margins for school catchment areas are fine. Most households moving to closer proximity of a school only move about a half mile. On average, rental moves average three miles.

Schools are not absent from any investor-developer’s considerations in building. Along with utilities, roads, hospitals and recreational parks, district heating schemes, police stations, transport and flood defences, state schools are part of the infrastructure funded by the Community Infrastructure Levy (CIL). Choosing how the money is spent is largely up to local planning authorities. CIL rates are assessed in pounds per square metre, and, according to the Planning Portal website provided by the Department of Communities & Local Government, “charging authorities should use [infrastructure planning] evidence to strike an appropriate balance between the desirability of funding infrastructure from the levy and the potential impact upon the economic viability of development across their area.”

To investors looking to maximize the capital growth potential of building new homes, the relative condition of all infrastructure components should be a consideration in the investment. Homebuyers and renters may be clamouring for properties to buy or rent, given the national shortage of homes, but these are still factors that play into where they conduct their search for suitable dwellings.

Investments of all types require myriad considerations and are best made with objective advice. An independent financial advisor can guide the investor to investigate factors having to do with specific investments as well as how they can affect overall wealth development strategies.

Who are First Time Home Buyers in the UK - and What Do They Want?

For younger people, simply being able to buy is a priority that hasn’t been accessible in recent years. Things are looking up, but many challenges remain.

To a certain degree, investors in housing need to think young. That is, they should consider the supply of buyers, those people who are making that first step onto the property ladder. Whether the investors and homebuilders (many working though real asset portfolio investing) are building higher-end single-family homes, or one-bedroom flats, those first-time buyers are the supply chain of customers who will push up demand for the product.

Not that demand is much of an issue in the UK. The country is critically undersupplied in homes, where the 120,000 new residences built in 2014 fall short of the 200,000 or more than need to be built every year. In the years following the 2008 recession, lending was tight and builders were nervous. Plans to build were scaled back. But with rising incomes and a number of Government-sponsored schemes that help builders and buyers - in particular, first time buyers - get in the game, building rates are up. Most importantly, buyers are making their moves.

But who exactly is the first time buyer? The following helps break it down:

Ages - The national average age of buyers is 29, which is higher than historical norms but not terrible in the overall scheme of things. In London, first time buyers’ ages have risen from 30 to 32 since the recession.

Wages - Housing charity Shelter teamed with KPMG to identify discrepancies between local housing prices, actual average wages and wages required to get a first-time buyer loan. For example in the South East, the average first home cost £230,000, which requires a wage of £46,000 but the median wage in that district is £24,000. For the UK overall, it’s £202,700 for homes, £40,500 is required and £22,000 is the median wage. The study also found that while 73% of people would prefer to own vs. rent, 69% feel there is not sufficient affordable housing.

In London, where prices are rising quickly, where the number of homes sold for £1 million increased by 25% last year yet the number sold for under £300,000 decreased by 9%, first-time buyers nonetheless were on the rise. How? The Council of Mortgage Lenders finds that in the Capital City that parental help is widespread in deposits and outright purchases.

Children? - A spokesperson for the Mortgage Advice Bureau told the Daily Mail that banks were increasingly asking questions about family plans, particularly when the borrowers had small deposits. They want to know if a working wife or husband planned to quit her or his job if the family adds children. Such borrowers can be refused on a vague, “you don’t fit my criteria,” the advisor said.

Regions - Of course, London is the least affordable area for first time buyers (average home price is £323,333). Northern Ireland (average home price is £80,703) is most affordable, while seven of the top ten affordable areas are in Scotland.

Pessimistic expectations - Propertywire.com reported in April 2015 that an attitudinal survey by the mortgage firm Halifax found 79% of people ages 20-45 believe that banks don’t want to lend to first time buyers; 21% believe it’s almost impossible to get a first-time mortgage. Halifax is quick to point out this is a myth – but perception can be reality.

Sensible - The Office of National Statistics shows that first time buyers have mortgage repayments that consume, on average, one-third of disposable income. In 2007, the height of the last housing bubble, that was closer to one-half of income. So buyers are at least setting themselves up for a realistic loan burden.

It is important to note that this is a recovering market. First time buyers in 2006 numbered 402,800, but fell to 192,300 in 2008. It is now 311,500 buyers (2014) and expected to climb further in 2015. Joint venture partnerships building homes and high rise flats need not worry their properties will sell.

Investing in construction as well as UK land or all other aspects of real estate may be at a critical moment in Britain - the opportunity is great, the market very strong and the overall economy appears to be on the upswing. But as with any investment, it’s most wise to speak with an independent financial advisor to learn how a position can affect a risk-exposure profile.

UK Strategic Land: The Attraction for Global Investors

By Kevin Ballard

Volatility abroad drives an interest in English property. But domestic demand for housing is just as strong - and long-term - a factor for investors.

Seven years after the global financial crisis and the recession that followed, the times could not be more challenging for investors. There is much uncertainty and fear in global markets.

We don’t have to look far to see major economic problems in Europe with the situations in Greece, Ukraine & Russia all well documented. The opportunist has always looked to the BRIC economies for reliable growth. Today, however, we see that despite a new government, Brazil is still struggling with no signs of improvement and Russia is having to deal with UN sanctions & falling investment. Whilst India has had a bad time, it is showing signs of growth but the once reliable Chinese markets are in a state of disarray. A bear market and a devalued Yuan do not bode well. Even in the U.S. where markets have shown steady growth toward record highs, there is cause for major concern due to a combination of China’s slide and historically low global oil prices. Both Warren Buffett and Gerald Celente (Trends Research Institute) are forecasting a crash or major correction in the US Market before the end of 2015. Only time will tell if they are correct but their records are pretty good!

It is in conditions such as those outlined above that the demand for non-market correlated funds increases. Non-correlated real assets, which include market-traded REITs, buy-to-let residential holdings and investments in the house-building sector (raw land, strategic land development and homebuilder firms) can provide that balance within a portfolio.

There are some fundamentals well known to both British and overseas’ investors. Stable governments and economies such as in the UK still provide security and predictability to global investors. Also, land and property are finite and are historically smart, non-correlating real assets that counter market volatility.

Due to population growth and youthful demographics, alternative investments in the UK is housing is particularly intriguing. Population growth and demographic factors are key reasons for such high demand. The Census 2011 revealed a net population increase of 7 per cent over the preceding decade, the largest population increase since census began almost 200 years ago and this certainly places pressure on existing housing stock. The ONS predicts population growth of over 17% in the next 20 years and with house building at its lowest rate in over 60 years the UK government is now referring to UK housing supply as being in ‘a state of emergency’. Increased immigration, higher birth rates, lower death rates, and an increase in single person households all combined with decades of undersupply have contributed to the current UK housing crisis.

There are many reasons as to why there is such high demand for homes while supply lags behind demographic needs. Suffice it to say that owners of land and built properties, investors and homeowners alike, are seeing high returns on their investments. London residential real estate is fetching prices more than 30 per cent higher than in 2007, before the financial crisis of 2008 and the recession that followed. Growth in prices outside London is also picking up steam now.

Still, why would an investor put money in the housing alternative to the stock market? Why would investors from within and outside the UK specifically look to diversify their portfolios with something such as property funds? How does strategic land investing serve both the investor and the high demand for homes?

To begin with, many investors simply like diversity, for all the reasons commonly cited and recommended by financial advisors. For an investor, finding land where new homes can and need to be built often provides a relatively quick upswing in asset value. A strategic land investment can turn empty fields into housing in five years, sometimes half that time.

But the situation in the UK goes beyond the norm, as critical factors are lined up behind real estate investing. They are:

The undersupply of housing needs at least 10-15 years of aggressive building - Virtually all observers and analysts echo what UK property fund managers tell their investors, namely: it will require construction of at least 200,000 homes every year for years to come to catch up with market demand. The country currently needs about one million new dwellings and will require even more in the future.

This is not just in London - in fact building is more likely to occur in places such as Manchester, Leeds, Peterborough, the South Coast, North West and the North East because of shifting populations of young people and growing economies in those areas. The inflated costs of housing and doing business in London have finally reached a point where tech companies, companies in transportation and the energy sector, as well as university spin-out firms, are happening outside of the Capital City (example: the University of Southampton’s medical research has spawned Karus Therapeutics, Synairgen, Epi Gen, Capsant and iQur, all generating jobs on England’s South Coast as they forge a healthier future on a global scale).

Government programmes to encourage home buying are working - Help to Buy, initiated in 2013, is helping thousands of younger buyers get on the property ladder for as little as a 5 per cent deposit. The Starter Homes initiative will enable both the construction (through an expeditious planning process) and purchase of new-build homes on brown field land at a 20 per cent discount rate to first-time, under-40 buyers. And the Help to Buy Isa enables near-future homebuyers to save a deposit with a Government contribution. With more qualified buyers gaining access to financing, property fund investors and builders have a bigger market to serve.

The planning process is improving - According to a 2014 report by planning consultancy Turley, the success rate of planning appeals for all types of development has risen from 35 per cent to 42 per cent in the two years after the National Planning Policy Framework (NPPF) came into force. Approvals of residential development of ten or more dwellings grew even faster, from 58 to 67 per cent approvals on appeal. The move to localism is indeed freeing up more land for building.

With stock markets on a volatile path and with some of the industry’s most influential investors/forecasters warning of a global market crisis I hope that financial advisors have taken a diversified approach to client portfolios. To use a Warren Buffett quote ‘’only when the tide goes out do you discover who's been swimming naked’’.

England’s North West: What Rising Rental Values Might Mean There

George Osborne’s vision of a “Northern Powerhouse” might already be having an effect. It could mean the advance of cities outside of London is underway.

The Kent Reliance Buy to Let Britain Report, a key reference point for private landlords in the UK, had a startling figure in its May 2015 edition: England’s North West region provided by far the highest current yield of 7.1 per cent. Yields are a measure for long-term property investors, a number that highlights the level of income (rent) received on a property relative to the value of the property.

For large and small investors interested in real asset funds, this is worth noting. Many investors in residential property do so with an eye on income, which this number - one month’s result notwithstanding - suggests can be maximized in an unexpected place.

The characteristics of property in the North West, much like many areas outside of London and the South East, are that those assets - existing buildings and land - are priced relatively low. But the fact that rental income is strong in places like Allerdale, Workington, Manchester, Merseyside, Lancashire and Cheshire suggests something important. If rents are rising there, the greater demand on the housing stock will cause those properties to increase in value over time.

And that might be already happening. While single-month indicators do not predict long-term trends, The Telegraph reported Land Registry statistics in early June 2015 regarding price rises from March to April: “Home owners in the North West benefited from 2.1 per cent growth [in prices] and those in Yorkshire & The Humber by 2.7 per cent – the largest rise of any region.” The Land Registry numbers were smaller for the East (0.3 per cent rise) and the South East (0.8 per cent).

On a somewhat larger scale than the one-off buy-to-let landlord, investors in UK property funds pay heed to local and regional economic trends. If they can buy land before the area experiences growth, they make more money. Property funds typically acquire land that is unused and ready for planning authority approval for a new use. If the goal is housing to accommodate a growing economy, the signs of growth are often found in both the native industries and those that will benefit from Government stimulation.

The North West economy is historically based on a broad variety of things: salt, chemical manufacturing, energy (renewables, nuclear and fossil fuels), food processing, pharmaceuticals, shipbuilding, transportation and tourism in the Lake District.

The district recently received a boost in Government funding to improve the Port of Workington, which will enhance the shipping capabilities of the region as well as the local manufacturing sector. In addition, Chancellor George Osborne issued a blueprint for growing the British economy in mid-2015 that contains a prominent directive to promote “a rebalanced economy and a thriving Northern Powerhouse.”

What might that powerhouse include? Osborne’s ideas include the following:

• Devolved powers to Greater Manchester, including consulting on Sunday trading and planning powers.

• Providing a statutory footing to Transport for the North (TfN), a focused remit “including working to introduce Oyster-style integrated and smart ticketing across the North.”

• TfN will be underpinned by £30 million of additional funding over three years to advance its work programme. TfN will also have a Chief Executive and Chair.

• TfN will also push forward plans to transform east-west rail and road connections and explore options for a new Trans Pennine Tunnel.

In summary, Osborne says “the Northern Powerhouse is a vision based on the solid economic theory that while the individual cities and towns of the north are strong, if we enable them to pool their strengths, they could be stronger than the sum of their parts.”

Is a property fund the best way to invest in UK land? Individuals should consult with an independent financial advisor to set broad strategies as well as to consider individual investments.

Could the Empty Homes in England Fix the Housing Shortage?

There are hundreds of thousands of houses and flats that sit empty in the UK for various reasons. Some might be reusable or appropriated to meet the housing shortage.

According to the UK website EmptyHomes.com, Government data on vacant dwellings show there are 610,000 empty homes in England. More than 200,000 of those have been vacant for more than six months. This information is derived from local authority Council Tax base data as of October 2014.

So does that suggest there is ample accommodation for the estimated 1 million UK households waiting to find a home to buy or rent?

The housing charity Shelter - which counts 279,000 long-term privately owned empty homes in England - calls it “a real waste of housing when there are so many homeless families looking for somewhere to live.”

To a certain degree it makes sense to use what’s already there. But note how Shelter also advocates for the building of new homes. This is because many of those empty homes are not located where people need and want to live. Indeed, many are second homes largely used for holidays. The organisation has no quarrel with either housing associations constructing modern, energy-efficient homes or private investors such as real asset fund managers who turn raw land into new neighbourhoods for middle- and upper-income residents.

The more homes in total, the less homelessness overall. According to a January 2015 report in the Mirror, there are almost 61,000 homeless households in the UK as of September 2014.

That said, George Clarke - architect, writer, lecturer and TV presenter on architecture and empty homes shows - makes several key recommendations on how derelict empty homes can add to the country’s useable inventory of residences:

• Treat demolition as the last option; refurbishing and upgrading is always preferred.

• Proper community consultation, done openly and transparently, is required for regeneration programmes.

• That a developer has full planning approval and secures construction financing for new building before demolishing existing structures on the site.

• Use a “mixed and balanced” urban design scheme to preserve salvageable existing properties in combination with new builds.

• Local authorities might promote and encourage homesteading, cooperatives and “sweat equity” schemes for procurement of empty homes for use.

• Where properties decanted for renewal are then left empty for a half-year or longer, they should be offered for temporary accommodation in a safe and habitable state.

The need to establish sufficient housing exists at all strata. The homeless need homes. Working people want to form households and yet rents and purchasing prices are beyond reach, particularly in London. Even the moderately well off cannot afford to live in Central London because year upon year of double digit price increases have sent the costs of residences above £2 million in many instances.

Government-sponsored lending programmes such as Help to Buy are having an impact, as is private investment in new communities by property fund managers. Homebuilders have consequently responded in 2014 and 2015 by increasing output. But given the rate of population increase in the UK and the demand it creates, the housing inventory needs to expand by a broad variety of methods.

Private investment in real estate is critical to the landscape. But individuals who look to real estate for asset appreciation should do so only after consulting an independent financial advisor. Various methods come with a broad range of risk.