01 Apr 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
- 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.”