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July 2020 Market and Fund Update.

The gradual reopening of the UK housing market over the past 2 ½ months had a dramatic result on activity – whilst it remains to be seen how much of this was due to pent-up demand, most observers are surprised by the persistence of the rebound which now has extra momentum with the Stamp Duty Holiday.

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Fund Performance Factsheet – July 2020

As per the 19th July, triggered by a confirmation from CBRE in line with RICS guidance that the Material Valuation Uncertainty Clause for UK residential property can be removed, the Fund re-opened for dealing. Last month I talked about how the re-opening of estate agencies has led to increased demand – this has now been translated into actual deals, with agreed house sales 32% ahead of last year (according to Zoopla), and transactional data seemingly being boosted further by the recent SDLT holiday announcement by The Chancellor on 8th July 2020. Furthermore, Rightmove’s research indicates that average asking prices of property coming to market in Britain hit a record, 2.4% higher than in March pre-lockdown, whilst the 3.7% annual rate of increase is the highest since December 2016. In a further sign of a return to normality, HM Land Registry started publishing transaction figures for the period of March to June. Based on that still limited dataset, LSL Acadata reported an annual house price change of + 0.9% to May 2020.

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Suspension in dealing lifted: TM home investor fund re-opens to investors.

The property valuer for the TM home investor fund, CBRE, announced that the Material Valuation Uncertainty Clause will be removed for residential properties going forward. As a result, the Fund’s Authorised Corporate Director, Thesis Unit Trust Management, in conjunction with the Depositary NatWest Trustee and Depositary Services Limited have lifted the suspension of dealing in units in the TM home investor fund with immediate effect.

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Fund Performance Factsheet – June 2020

Following nearly three months of lockdown we are seeing “light at the end of the tunnel”. As reported last month, on 18th May estate agencies in England reopened and although all expectations were for a cautious start, this appears not to have been the case at the time of writing. Zoopla’s latest data states that sales agreed were up 4% by mid-June, with demand up 46% on March 2020 and supply 15% lower than June 2019. This relative lack of supply is maintaining pricing, with asking prices up 7% year on year and Zoopla’s UK House Price Index up 2.4%. Similar dynamics exist within the lettings market with demand up 60% on March 2020 whilst supply up ‘only’ 36% – leading to a 1.5% increase in the ONS rental index.

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June 2020 Market and Fund Update.

Activity in the English housing market continued to accelerate throughout June following its reopening mid-May, with estate agents, buyers, sellers, landlords, renters, lenders, and removal companies emerging from two months of hibernation. Wales saw a partial reopening on 22 June, with Scotland following, more cautiously, on 29 June. The initial bounce has been remarkable whilst the outlook on where the market will settle remains uncertain. As we are moving into the first post-lockdown phase, we are assessing the latest on house prices, rental demand, and supply of properties.

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May 2020 Market and Fund Update.

The unlocking of the English housing market led to an immediate uptick in online browsing and demand for sales as well as rentals.

One week after the reopening of the market, Rightmove reported demand for rental property being up 33% compared to this time last year, with Monday May 18th reporting the highest level of rental demand ever recorded in one day on Rightmove.

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April 2020 Market and Fund Update.

One of the defining elements of any evolving economic shock is the lag of reliable data – this is even more the case with the current combination of Covid-19 and a shock to oil prices. Both led to something far different from a “normal” recession, and a reliable picture of what the world looks like now will emerge only slowly over the coming weeks and months. Despite that, we are trying to work with what we have to give you the most appropriate snapshot on the UK residential property market at this point in time, and the performance of the TM home investor fund.

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Fund Performance Factsheet – April 2020

Lockdown measures continue to impact the number of housing transactions in the UK and dealing in the Fund remains temporarily suspended, effective 10:30pm on 17th March, whilst its Standing Independent Valuer, CBRE, expresses material valuation uncertainty. CBRE continues valuing the 203 properties in the fund in line with proper market practices, adopting a comparable method of valuation – although given the low transaction volumes there is a dearth of evidence on which to rely, and there currently seems to be more reliance on agent sentiment and asking prices than one would expect within a ‘normal’ market. However, we have been advised by our valuers and letting agent that enquiries to local agents increased markedly in the last week of April, which we assume is people envisaging an imminent end to Lockdown, and implies that the underlying sentiment I talked about in February remains.

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