Most shareholders in The Property Franchise Group support a proposed merger with rival firm Belvoir, it has been confirmed.

A joint statement to the London Exchange says that investors holding 56.7% of TPFG shares back the move.

A smaller proportion of Belvoir shareholders have so far given their backing, with 31.2% indicating their support.

Unanimous

The boards of both companies have given their unanimous approval to the merger, which would see TPFG shareholders hold around 51.75% of the combined group and Belvoir investors 48.25%.

It has also emerged that Belvoir shares are valued at 277p under the deal’s arrangements, with the current price around 260p. The combined company is valued at £214.4 million.

Both companies saw their shares dip in value after the announcement of the merger earlier this month, but have since recovered well, especially Belvoir.

Merged

Each firm has planned general meetings of shareholders next month to vote on the deal, which is scheduled to go through before the end of March.

The newly-merged group will boast more than 930 property franchise locations, managing approximately 152,000 tenanted properties across the UK and will be expected to sell more than 28,000 properties per year.

CEO to leave

Belvoir Group’s CEO Dorian Gonsalves (main picture, right) is set to leave the company under the terms of the merger.

Louise George, Belvoir’s CFO, is also set to go, although both senior executives will stay on for 12 months to help the two firms integrate.

Paul Latham, Chairman, TPFG

Paul Latham, TPFG’s chairman will chair the combined group. The new company’s board will include Gareth Samples, TPFG’s CEO (main picture, left), David Raggett, TPFG’s CFO, and Michelle Brook, Belvoir executive director.

Richard Martin, founder of TPFG, will step down from the TPFG Board to take on a new role as lifetime president, and will continue to provide the combined group board with strategic advice.

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A recruitment firm that works for many estate agents has had a complaint about its marketing upheld by the Advertising Standards Authority (ASA).

The complainant, who is likely to be an estate agent, was unhappy with the tone and claims made within a mailshot sent out via an industry media platform.

Property Industry Eye (PIE) emailed the mailshot to its database on behalf of Grantham-based Outsourceful Ltd in August last year.

The complainant believed the advert within the mailshot perpetuated negative racial stereotypes and challenged whether they were harmful and likely to cause serious offence.

Philippines

The mailshot copy included a claim that Outsourceful could find overseas staff  “predominantly from the Philippines” who would work for a quarter of the cost of a UK employee, claiming one agency saved £66,000 a year on salaries, and that they were harder working and more reliable than their UK counterparts.

Upholding the complaint, the ASA says: “We understood that there was a stereotype that Asian people were hard workers and self-sufficient…[and] considered there was a risk that ads that reinforced or promoted stereotypes regarding Filipino people’s work ethic, including a propensity not to take sickness absence, could be harmful to both groups and leave them open to exploitation.

The ASA sought a view on the ads from the Kanlungan Filipino Consortium, a charity representing Filipino and other migrant communities in the UK.

Recruitment

“Their view was that the ads used language which supported racial and ethnic stereotypes about Filipino workers,” the ASA says.

“They considered that such stereotypes might influence UK companies to recruit Filipino and other East and Southeast Asian migrants on low wages, which could increase cases of labour exploitation and trafficking amongst Filipino workers, both in the Philippines and abroad.”

On that basis the ASA says it concluded that the ads had not been prepared in a socially responsible way because they promoted harmful racial stereotypes and that they were also likely to cause serious offence to some people.

Outsourceful says it has made extensive changes to its website to address the concerns raised, and that they would not use the email ad or similar emails again.

PIE told the ASA it had no editorial control over the content of the email and that it checked its content prior to sending for unsuitable or inappropriate content and found there to be none. They did not receive any complaints from their subscribers.

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The negative effects of higher mortgage rates on affordability were overestimated throughout 2023 with house prices dropping 1-2% rather than the forecast 6%, research from TwentyCi reveals.

Its latest Property and Homemover Report shows new instructions were up by 2% compared to 2022 and continued to average around 400,000 per quarter.

CORE OF ACTIVITY

Although a proportion of these new listings were a consequence of homeowners struggling to afford increased mortgage payments and therefore downsizing or selling up, there was still a substantial and solid core of activity.

On average, sellers across the UK achieved 96.6% of their original asking price, a decrease from the 99.4% achieved in 2022 and dropped by 20% to around one million sales – similar to pre-pandemic levels – with fall throughs have declining 14% year on year.

Alex Bannister, Economist

Alex Bannister,  Economist and Independent Board Advisor to TwentyCi, says: “A year ago, the consensus forecast suggested residential property prices in the UK would drop by 6% in 2023 amidst a shrinking economy and a view that property was substantially overvalued.

“In reality, house prices dropped by around 1-2% and the economy skirted recession despite higher-than-expected mortgage rates. Transaction levels dropped by 20% to return to pre-pandemic levels of around 1 million sales in 2023.

OVERESTIMATED

And he adds: “It appears most commentators overestimated the negative effects of higher mortgage rates on affordability and while sellers reduced asking prices, this did little to reverse the pandemic-driven surge.”

“It’s impossible to guess the net effect of events such as the conflicts in Ukraine or the Middle East and a UK general election/related giveaway budget. Assuming these have minimal impact, and the labour market remains robust with inflation under control, there is no obvious trigger for a further reduction in average UK house prices.”

Colin Bradshaw, TwentyCI

Colin Bradshaw, TwentyCi Chief Executive, says: “Many sellers have been overly optimistic about pricing, and it seems the tide is finally changing.

“Mortgage affordability and increased supply are forcing a shift in properties with overinflated pricing.

 “The housing market is holding up rather well despite everything being thrown at it.

I am not saying all is rosy in the garden, rather given the circumstances 2023 could have been a whole lot worse.”

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Gary Hersham’s Beauchamp Estates has opened two offices in the South of France in the luxury resorts of Mougins and St-Jean-Cap-Ferrat (main picture) as it attempts to capitalise on the post-pandemic return of super-rich international buyers to the French Riviera.

The two new French branches, known as Beauchamp Estates Mougins and Beauchamp Estates Cap Ferrat, offer sales, lettings and property management services and each are situated in ultra-prime locations.

BILLIONAIRES

They complement the existing branches in the ‘billionaire’s holiday destination’ which are located in Cannes and St Tropez and it is also looking at new office premises in Monaco and London.

Beauchamp Estates Mougins office and team.

Providing 485 sqft (45 sqm) of commercial space, Beauchamp Estates Mougins is located on the Avenue Saint-Basile, just off the Penetrant Grasse-Cannes express-way, one of the principal routes into the region.

Beauchamp Estates Cap Ferrat office and team.

Comprising 1,830 sqft (170 sqm) of office space, the Cap Ferrat branch is onon Avenue Claude Vignon, in the centre of St-Jean-Cap-Ferrat, enabling the office team to reach the various ultra-prime waterfront property locations.

Both branches have been newly refurbished with the Beauchamp Estates name and logo on the fascia, and the smart glass fronted facades featuring windows displaying property instructions and video-screens.

Inside, both offices have stylish contemporary interiors with meeting areas for clients, office space for the teams and private consultation space.

The teams are led by Adrien Willing-Lamy, MD of Beauchamp Estates (France), supported by a team of sales and lettings managers and negotiators and property management staff.

PENT-UP DEMAND

Willing-Lamy says: “Since the end of the COVID-19 pandemic we have seen a surge in pent-up-demand and ultra-prime property values along the French Riviera have risen by 15% to 20%.

“Over the last 12 months we have seen the return of international buyers especially wealthy purchasers from the USA, Middle East, UK, Switzerland and Nordic countries..”

Gary Hershham, Beauchamp Estates

Gary Hersham, Founding Director of the firm who featured in The Guardian profile last year, adds: “One of the results of the COVID-19 pandemic is that clients learnt to work from anywhere in the world and operate their business interests from home or the office.

As a result of this transformation our clients looking at buying or renting luxury homes on the French Riviera are increasingly looking at having second homes rather than purely summer vacation homes, where they can work remotely, whilst enjoying a change of scene and sunshine lifestyle.”

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Deposit alternative platform Reposit has signed new deals with three big estate agencies.

SW firms Symonds & Sampson and Webbers plus Northern agency Bradley Hall all now offer their landlords and tenants the Reposit service.

The new partnerships also coincide with a 69% increase in sales for Reposit during December compared to the same period in 2022.

Surge

Reposit says this surge in demand highlights the growing recognition among agencies of the product as a valuable alternative to the conventional cash deposit.

Symonds & Sampson, which operates in Hampshire, Dorset, Wiltshire, Somerset, Devon and Cornwall, is offering an alternative to the cash deposit for the first time in its 166-year history.

Shared

Ben Grech, CEO at Reposit (main picture), says: “These partnerships reflect a shared vision for efficiency and customer-centric solutions while offering a practical solution for agencies navigating the ever-changing rental landscape.”

Reposit’s deposit alternative fits with our goal to provide efficient, customer-focused solutions.”

Rachael James, Head of Lettings, Symonds & Sampson

Rachael James, Head of Lettings at Symonds & Sampson, says: “We are excited to partner with Reposit to enhance the rental experience for both landlords and tenants.

Since partnering with Reposit, Symonds & Sampson has provided its landlords with over £96,000 in cover, including £36,000 of additional cover to what they would receive with a cash deposit.

Tenants pay a one-week non-refundable fee instead of five weeks’ rent with the Reposit plan. And landlords receive up to eight weeks’ worth of cover against rent arrears and dilapidations.

Bradley Hall is based in the north east, and Webbers covers Cornwall, Devon and Somerset.

Don’t believe the naysayers. Tenants who ‘zero deposit’ are better off in the long run

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The recent sales of Stirling Ackroyd, Alexander & Co and Chestertons represents a huge vote of confidence in the UK lettings market.

Despite endless articles about the decline of the buy-to-let market, it seems that a private equity fund and a large European property conglomerate still have enough confidence in the sector to spend a nine figure sum on three large acquisitions, and I believe that this confidence is fully justified.

Whilst over 200,000 buy to let properties were sold in 2023 , most of these sellers had bought their properties quite recently and had large mortgages on them. Many were forced to sell because their mortgage payments tripled after Liz Truss’s disastrous budget.

However, landlords who have owned their properties for longer bought their properties at much lower prices and have smaller mortgages or own their properties outright. These landlords are much less likely to sell because, if they did, they would incur a huge Capital Gains Tax bill.

Enormous market

Despite the recent disposals, the size of the buy-to-let market in the UK is still enormous. According to HMRC, 2.79 million landlords filed self-assessment tax returns in the tax year 2021 /2022, which showed that they earned £48.8 billion from property investments. And this figure excludes all the landlords who operate through limited companies.

Against this backdrop, the loss of 200,000 properties, whilst a tragedy for every tenant that was made homeless, hardly spells the end of the BTL sector.

Within five to 10 years, the lettings market will be dominated by a small number of mega businesses.”

My expectation, therefore is that the consolidation of the letting industry will continue unabated. We are still dealing with record numbers of business sales and our clients are achieving record prices for good quality managed letting businesses and portfolios.

The pace of the consolidation is so rapid that I would forecast that within five to 10 years, the lettings market will be dominated by a small number of mega businesses with independent agents becoming increasingly rare.

If I am right, I may have to start thinking about the next industry sector that is likely to consolidate!

Adam Walker is a business sales broker who has worked in the property sector for over 40 years.

www.adamjwalker.co.uk

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Leaders Romans Group has acquired Stirling Ackroyd, Alexander & Co and Peter Ball sales, lettings and surveying businesses.

All branches, operating across London, Surrey, Oxfordshire and Gloucestershire, will continue to trade under their current brands, it has been announced.

CEOs depart

Nick Dunning

Nick Dunning, CEO at Stirling Ackroyd and George Thomas, CEO at Alexander & Co, will leave their respective businesses after a short transition period. All remaining team members will transfer to LRG.

Michael Cook, CEO at LRG (main picture), says: “Starting 2024 with the acquisition of three fantastic, well-known, and respected brands cements our five-year strategy, focusing on growth across the UK.”

Matthew Light, Group Mergers and Acquisitions Director at LRG, says: “Stirling Ackroyd represents our second largest acquisition with 31 branches, with Alexander & Co’s ten branches also joining the LRG group of brands in the same week.”

Stirling Ackroyd is a fantastic business that increases our share of the London market.”

“Stirling Ackroyd is a fantastic business that increases our share of the London market, particularly on the lettings side,” he says.

“The acquisition of Alexander & Co follows a long relationship with George Thomas, which has enabled us to reach an agreement when the time was right for both parties to work together”

Blend

George Thomas, CEO at Alexander & Co, says: “Alexander & Co and Peter Ball are well-established businesses that have been helping people let and buy homes for over 50 years.

“Our three core business values of being personal, proactive and ethical blend perfectly with those of LRG, and I am confident our clients and team will thrive as part of the wider LRG group.”

Nick Dunning snaps up London agent Stirling Ackroyd

Industry giant Leaders Romans Group sold to private equity firm

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Two thirds of private renters experienced a problem with the quality or condition of their property during the past six months, research from the TDS Foundation reveals today.

While 40% of tenants did not have any problems, 60% encountered one or more problems, the report reveals.

TOP FIVE

The five most common problems included leaks or dodgy plumbing (21%), difficulties keeping their home warm (20%), repairs not being carried out (18%), serious problems with damp or mould (16%) and outside doors, walls, roofs or windows being in need of repair (16%).

Of this group, 85% reported these problems to their landlord or letting agent, with over three quarters (78%) saying the issue was either fully or partially addressed.

The minority of tenants who did not report the issues to their landlord or letting agent said this was due to a perceived ineffectiveness of reporting (30%), the hassle involved (27%), fears about not being seen as a “good tenant” (23%) and concerns about potential rent increases (22%).

REPORTED

Dr Jennifer Harris, Head of Policy and Research at TDS Group, says: “Whilst a large proportion of tenants are experiencing problems with the condition of their property, they are being addressed by landlords in a majority of cases when they are reported.

Dr Jennifer Harris, TDS Group

“That said, it is worrying that over one in ten tenants who had problems with their homes did not feel confident reporting it.”

And she adds: “The Government’s plans to reform the rental market, including developing a decent homes standard for private rented housing, need to ensure tenants feel confident to speak out where their homes meet all required standards.

“The TDS Foundation will continue to work to ensure tenants fully understand and make use of their rights when calling out the minority of landlords failing to tackle poor quality housing.”

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