When my wife Colette and I first decided to purchase a property in Edinburgh with all our savings, renovate it and let it out to tenants, little did we know that 21 years later Grant Property would be based in ten cities across the UK – sourcing, renovating, furnishing and managing residential properties for individuals and institutional investors based in 30 countries around the world.
Since setting up all those years ago, we have carried out more than 2,500 renovations and currently manage more than £300 million of UK residential property. We now employ more than 100 staff.
Colette and I have both remained very heavily involved in the running of the company and have seen both good times and bad times. The company grew very quickly as the property market went through a boom in the nineties. This gave us the stable foundation and solid reputation to survive the deeply painful banking crisis nine years later.
The financial crisis triggered the collapse of many banks, and that in turn wiped out most property companies. Grant Property survived, largely because of the focus of investing in safe, traditional properties.
Despite the banking collapse and the chronic downturn in confidence, the property investment market has not only survived, but positively thrived in the longer term. In truth, it always does. In 21 years capital values have risen by 7 per cent a year on average. Rents have risen by an average of 5 per cent.
Overall returns, when structured correctly, have risen 28 per cent a year in that same period.
We have witnessed a lot of changes over the years. Property prices have trebled. Mortgages got cheaper as base rates spiralled downwards from 5 per cent to 0.5 per cent in the aftermath of the financial crash. Regulations regarding rental properties went from virtually none at all to the frankly labyrinthine. Advertising properties to rent changed from being focused 100 per cent on newspapers to 100 per cent on the web. In addition, overseas investors used to be a minority, but now they are the majority. The prospect of Brexit and the drop in the pound has made investment in UK property more attractive, as foreign buyers can get more for their money and they also consider UK property a safe bet.
As always, some things haven’t changed, though. Property remains in very short supply – forcing up both prices and rents. Politicians are still forever talking about the housing shortage crisis. And the fundamentals on the business side are the same. It’s still all about people, service and trust. Our business has grown through happy clients referring their friends to us.
I am immensely proud of our achievements over the last two decades and more. We’ve created thousands of safe homes to rent, and managed to scoop some prestigious awards along the way. Perhaps one of the best things we did as a company was back in 2006, when we decided to reduce our carbon footprint by renovating our properties in a different way.
Inspired by a talk by President Bill Clinton on Global Warming and “putting something back” we learnt that property accounts for 52 per cent of all global warming. When we looked into it, not only did we manage to cut the carbon footprint in every property by 30 per cent, we also cut tenants energy bills by 30 per cent. And we’ve been doing it ever since. We were subsequently invited to meet President Clinton in New York.
Meanwhile, one of my funniest memories was buying a flat which still had a tenant in it. Frankly, we scared the living daylights out of each other. The tenant had agreed to leave but then forgot to do so…
Is buy‑to‑let still a good investment? Well, the key to buy-to-let success is the thriving rental market, especially where there are students. Universities continue to thrive and expand. Accommodation remains in short supply. The student market is less affected by economic events as other sectors, thereby providing more stability for the investor.
According to an interesting report by Savills, investment in student accommodation is forecast to rise by 17 per cent this year. Even in the case of a hard Brexit, there would still be high demand from UK and international students.
Our 21st anniversary in the iconic setting of Edinburgh Castle is symbolic for us as it represents the key of the door – a fitting image for a property company. It is also in the city where our business started and it is still the location of our head office. And Edinburgh has proved to be a huge attraction for some of our foreign investors who are coming all the way from the United States, the Middle East and South East Asia to help us celebrate.