CORONA VIRUS UPDATE

Due to the recent outbreak of the Coronavirus, Concept Capital Group have conducted a risk analysis to understand the impact this will have on the company and its ability to function. The conclusion of the   analysis   identified   that   there   has   been   a   change   to   the   financial   markets   globally   and   the consumer’s   appetite   for   speculative   investment;   this   is   due   to   the   cascading   effects   of   market speculation. However, Concept   Capital   Group   operations   are   business   as   normal,   and   we   remain   relatively unaffected so far by this virus situation as the modular homes are tangible asset that do not fluctuate with market movements. We are extremely fortunate that we have a natural hedge in our model as units are constructed on order and not stockpiled. If   we  were   to encounter  any changes  to  our operation  that may  affect investors, a follow up update will be made.

Key partners and suppliers

The joint venture of   Concept   Capital   Group,   Social   Park Housing   and   Knights   Mobile   Homes   are following the necessary guidelines outlined by the government and are working from home where logistically   possible   to   avoid   mass   congregation.   However   we   are   still   able   to   conduct   investor relations with existing and potential investors, management services of the units and its tenants and production of the units. Customers

Our customers are retail investors and institutional investors such as housing associations.

Retail Investors As mentioned earlier that consumer’s appetite for speculative investment has declined but we are operating as normal with an increase in sales and marketing enquiries from investors who are looking for fixed and robust tangible assets. Institutional Investors Our institutional investors such as housing associations still need to fulfil their obligation for social housing for vulnerable people with the need now becoming greater still.  Breaking down the bare components of vulnerable people in need for social hosing; these are young mothers, people fleeing from violence, elderly individuals and so forth. They are on a currently on a waiting list for a permanent property of their own and will be placed in emergency housing that is short term accommodation provided by a council while they assess their applications. Emergency housing could be defined as:

  • bed and breakfast (B&B)
  • homeless hostel / YMCA
  • self-contained rented flat or house

During this outbreak the need for social housing is more greater than before to reduce the exposure risk of Coronavirus for vulnerable individuals and families living in emergency accommodation.  An article written by the BBC on the 28  

Th January 2020 stated that the “National Statistics collected the   data   from   Scotland’s   local   authorities   between   1   April   and   30   September   2019.   There   were

18,645 applications for homelessness assistance during this period.” Using Scotland as an example of one   area   within   the   UK   shows   18,645   applications,   if   expanded   will   include   families   as   well   as individuals requiring housing but are in emergency housing.

As   the   government   has   moved   towards   banning   mass   gathering   in   public   places   to   contain   the outbreak,   we   have   to   explore   the   idea   of   how   many   of   these   applicants   will   be   in   emergency accommodation that may have 20 plus bodies under one roof. As a conclusion we expect more increased interest from this side of our customer section to help tackle and elevate the potentially of exposure to the vulnerable individuals.

Housing market frozen

The housing market has been frozen after the Government asked estate agents to close branches during the coronavirus lockdown. Due to legal uncertainty, cutbacks in mortgage lending and public health concerns, buyers and sellers are being asked to delay home moves if at all possible. Housing Secretary Robert Jenrick said “parties should show pragmatism” to delay a move, especially if any members of  

the chain are isolating or being shielded – but he allowed that if moving is unavoidable or the property is vacant, advice on social distancing must be followed

throughout. The key points are that;

Purchasers and sellers in a chain are at an increased risk of transactions falling through Viewings have been suspended across the country

Lenders have restricted new lending to 60 percent of the purchase price while some

temporarily suspended all new mortgage applications Because we build our pre – fabricated homes in a factory there is no buyer – seller chain with what we

sell, we usually do offer viewings however as an investment and not a property for investors to live in there is not necessarily a need to view one of our static homes before you purchase – they have uniform designs. Lastly and most importantly   

we do not offer mortgages or lending at all on these homes as they are placed on pitches given to us by the local council, basically – NO mortgage and NO land registry deeds. These differences to typical property are is why we are still able to function almost as normal, with the only change being a slight delay to logistics. Do you understand? Allow me to quote guidance from the BBC & Guardian today: https://www.theguardian.com/business/2020/mar/26/housing- market – frozen – by- government-during – coronavirus – lockdown For those  looking to sell, it said there “should be no visitors to your home” for viewings or valuations although people are allowed to speak to estate agents over the phone and conduct virtual viewings.

BBC news website – https://www.bbc.co.uk/news/business-52051174 The government said that while there “is no need to pull out of transactions”, “we all need to ensure we are following guidance to stay at home and away from others at all times”.

If a property is vacant, people can continue with the transaction, although they must ensure they are following guidelines with regards to home removals.

But if the house is occupied “we encourage all parties to do all they can to amicably agree alternative dates to move”. Lucian Cook, head of residential research at estate agent Savills UK, told the BBC the practical problems of buying and selling properties at the moment would have “a real impact on transaction levels”.

“There are real difficulties around viewings, getting mortgage valuations done, [and] the conveyancing progress.”

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