Some describe unmortgage as private shared ownership, we see this asset class as so much more.
In October 2016 we conducted a trial where consumers sourced - at no cost to us - £92m worth of residential property. From this we were able to achieve our 'better beta' target by picking the most desireable and best value opporunities to construct a portfolio yielding a net 5%.
By partnering with homeowners Unmortgage changes the way we invest in residential property. Investors benefit from higher net yields because homeowners source and maintain mid-market residential property. Unlike buy-to-let, investors receive 100% of gross rental income. With Unmortgage there is no loan, no credit risk.
Creating An Investment And A Homeowner
Residential property has traditionally been a less popular asset class because the governance and operational overhead of standard residential property investment is unscalable - what is commonly known as the gross to net leakage problem.
Unmortgage not only changes the economics of investing in residential - by partnering with the occupier - but also opens up the largest asset class: owner-occupied residential. By way of comparison, the total market cap. of all UK equities is £2tn, which is less than 50% of UK Residential.
Consumers do the work of both sourcing the best property in the best areas and take on the cost and responsibility of day-to-day maintenance. In return, the Unmortgage helps them to get on the property ladder in the area they actually want to live, all without exposure to debt and interest rates.
Investors get access to residential property without the complexity and at a significantly lower cost - just a flat asset management fee. The unmortgage provides scalable and highly diversified access to UK property.
Ray Rafiq-Omar - Residential Property since 1999 with 2 year diversion at Insight Investment’s LDI department
Jon Fox - Started at Fidelity Investments and more recently at Bloomberg in corporate sales