31 August Interim Update

On 29 July 2022, we announced our latest quarterly portfolio performance, including updated financial information on all properties, dividend changes, EPC ratings, etc. Read the full announcement here.

On 31 October 2022, we will announce our next quarterly portfolio update, for the period to 30 September 2022. The resale market will be closed from 10am that day until 10am, 3 November 2022.

This interim update provides an overview of activity during August, but does not include property-specific information.

Market Outlook

The Consumer Prices Index (CPI) rose by 10.1% in the 12 months to July 2022. Inflation is now predicted to reach stratospheric heights, with Citigroup predicting it will hit 18.6% in January 2023 and Goldman Sachs 22.4% also in early 2023 if gas prices remain elevated. Financial markets reflect that the Bank of England may double official interest rates by May 2023 to over 4%, with some arguing that it will need to go higher.

Reducing exposure to rising interest rates

As mortgage interest rates rise significantly and mortgage refinance becomes uneconomic, we are continuing our programme of selling units and using these funds to repay mortgages. Where a property has a substantial cash surplus, we are using these excess funds to reduce the mortgage; where the mortgage has already been fully repaid, we will place excess funds in interest bearing term deposits.

In August, we completed the sale of 9 units and repaid £1.6m of mortgages, representing 2.9% of total mortgage value. The loan-to-value ratio across the portfolio has now reduced to 48%. Our pipeline of further disposals is well-developed for September and October, and we will provide further updates in the months ahead. This activity will continue to reduce interest payments, enhance potential dividends and reduce refinance risk.

The average total return from discretionary sales of units now stands at 28% — clients can see the full performance of all sales via our selling record.