Fund Performance Factsheet – December 2019
We’ve published the latest factsheets for the fund, and they can be downloaded from the link below.
Whilst many commentators are talking about a “Boris Bounce” in the property and financial markets, this will take time to feed through to the property market as deals need to be done and transactions complete. Estimates are that there were 65,500 transactions in December, down 13.2% on the (revised) estimate of 75,500 in November. December normally sees a 1.9% fall in sales versus November, so on a seasonally-adjusted basis, the fall is closer to 11%. Overall, the estimates of transactions in England & Wales for 2019 is 822,181 – 6.0% lower than the 874,682 sales in 2018. If this is correct, it will be the lowest level of annual sales since 2013.
The LSL Acadata House Price Index shows UK average prices remained relatively flat, with Greater London, Yorks & Humber and Wales having the highest levels of growth but, in reality, the regional differences are quite small. The independent valuation of the Fund’s properties is broadly flat over the past 3 months, with a 0.1% uptick in December.
The December RICS Housing Survey states that quarterly (seasonally adjusted) figures on tenant demand picked up again modestly. At the same time, landlord instructions decreased again with this indicator being negative since 2016. The latest ONS rental data states rents increased by 1.4% YTD. The Fund’s rents increased by 1.56% over the same period. The imbalance between rising demand and falling supply leads to projections of around 2% rental growth over the coming year, and is anticipated to accelerate to average closer to 3% per annum over the next 5 years. It is worth noting that five-year price expectations, at 3.5% pa, are now above the rental predictions for the first time in a while. The Fund’s properties are almost fully let, with eight vacant at the month end – two of which are being sold as part of the on-going asset management activity. One of the remaining six is reserved, leading to a 97.5% occupancy rate.
The Investment Committee approved the deployment of cash in November 2019, with an increased amount being authorised post-election. Further to this, the Fund Management team are in advanced conversations with developers in the Midlands and North West/Yorkshire to acquire a number of new properties for the fund.
Finally, in addition to the newly obtained ESG-rating from 3D investing, the Fund Management team started implementing its 2020 Environmental Improvement Plan.
Third-party platforms will have different classes available. A selection of platforms and the available classes are shown below, but please contact us if the online platform you use is not shown.
Please note that Hearthstone is not able to provide financial advice, and the information on this page should not be taken as advice to invest in the fund, or as to the suitability of the fund, a specific share class, or platform for your personal circumstances.
Halifax Share Dealing, Tilney Bestinvest, Charles Stanley Direct, iWeb:
Hargreaves Lansdown (telephone/postal dealing only), Interactive Investor, Alliance Trust Savings, AJ Bell Youinvest:
> For General Investment Account, pension/SIPP or ISA: Class D (ISIN code GB00B9608795)
Investing involves risk. Investors should be aware that the value of an investment and the income from it can fall as well as rise, and they may not receive back the full amount they invest. Past performance is not a reliable indicator of future results.
The Authorised Fund Manager is Thesis Unit Trust Management Limited, Exchange Building, St John’s Street, Chichester, West Sussex, PO19 1UP. Authorised and regulated by the Financial Conduct Authority.
Hearthstone Investments PLC is the parent company of the Hearthstone Investments Group. Regulated business is carried out by Hearthstone Asset Management Limited. Hearthstone Asset Management Limited is an appointed representative of Thesis Asset Management Limited which is authorised and regulated by the Financial Conduct Authority (114354).