Share Name Share Symbol Market Type Share ISIN Share Description
Ground Rents LSE:GRIO London Ordinary Share GB00B715WG26 ORD 50P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 123.50p 123.00p 124.00p 123.50p 123.50p 123.50p 6,307 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 4.8 20.2 21.7 5.7 115.01

Ground Rents Share Discussion Threads

Showing 101 to 125 of 125 messages
Chat Pages: 5  4  3  2  1
DateSubjectAuthorDiscuss
04/8/2017
13:49
1 step towards removing leasehold for new build houses... The government has already shown its willingness to make changes to the scheme, after it last month said it will limit the use of Help to Buy for leasehold purchases (where the rights of ownership are time limited, albeit usually for a very long time). Leasehold purchases can lead to extra fees for owners to the person who owns the freeholder. The government's spokesman said: “As a government committed to building a fairer society, we’re taking action to stop the unfair use of leaseholds. This includes, as far as possible, removing the Help to Buy Equity Loan on new build houses where they are sold as leasehold." The spokesman added: "In specific circumstances where it’s justified for a house to be sold as leasehold, Help to Buy Equity Loans will only be made available if the ground rent terms are reasonable.” http://www.cityam.com/269727/housebuilders-shares-plunge-reports-say-end-help-buy-table
sikhthetech
03/8/2017
08:53
Liberum; Portfolio update Event Ground Rents Income Fund has provided additional portfolio disclosure following the recent consultation on proposed leasehold legislation changes launched by the Department for Communities and Local Government. The focus of the proposed legislation changes is on leasehold houses and leaseholds with ground rents that double in perpetuity every 10 years. 18% of the portfolio by value and 17% by ground rent income is attributable to doubling ground rents, of which 4% is assets with 10-year doubling rents. These assets double a maximum of three times before reverting to flat or index-linked reviews. 15% of the number of units in the portfolio and 11% of the ground rent income is attributable to leasehold houses. 2.7% of these assets contain doubling rent reviews on a 25-year review pattern. The company is considering asset management options for certain assets within the portfolio following the issues raised by the Government. They have reiterated guidance for a £5.5 - £6.0m reduction in the value of the portfolio of doubling ground rents assets compared to the March 2017 valuation. This would lead to a NAV per share of 132p (diluted NAV 130p). Liberum view The shares rallied 4% yesterday following the company's update and now trade on a 5.2% discount to the pro-forma diluted NAV assuming a £6m writedown. We believe the discount may widen slightly until there is greater clarity on the proposed changes. The £6m writedown relates to the portfolio of doubling ground rents assets but the valuation of the leasehold houses in the portfolio may also be impacted by weak investment demand.
davebowler
02/8/2017
14:59
Thanks for the considered response @Jb. Today's RNS did read well, though didn't seem to be much new. Probably the main point was that they still expect the same write-down to NAV as they'd previously expected, which seems a positive.
spectoacc
02/8/2017
12:30
Spec, that is an interesting question. It is clear that there will be changes as far as the creation of new leaseholds is concerned. Also the focus of controversy/scandal is on the 10-year doubling ground rents and to a lesser extent on the leasehold houses. It may be that new solutions or alternatives to leasehold are proposed for new developments. Changing contracts retrospectively is another matter entirely. I think in order to do so the contracts would have to be deemed unfair (at the time) or 'onerous'. Even then, as TW says, customers had independent legal advice. 'Onerous' has been used by the government to describe only a minority of ground rents. The examples that keep reappearing in the press are expensive leaseholds that double every 10 years. If more housebuilders come forward to fund changes to these leaseholds then this should be welcomed as helps us out of the tricky business of changing existing contracts. As has been pointed out in several posts, and has been helpfully highlighted this morning by GRIO the company doesn't hold much in the way of leaseholds that could be deemed onerous. Regular leaseholds that are at or less than £500 pa in London or £250 pa outside, that increase in line with inflation, are the industry norm and as such I don't believe could be considered onerous or unfair. Indeed, I haven't seen it suggested that such existing contracts could or should be changed. It will be enlightening to read GRIO's submission to the consultation which will appear in due course. Personally, I believe that GRIO offers value at least up to adjusted NAV. Some have even suggested that GRIO's assets will become more valuable as new supply will dry up. That is certainly possible but it may be a little early for such speculation. My plan is to scale in on dips which may be inspired by press reports, although in the absence of anything new these may fade. The government must be hoping that more housebuilders step up to the plate and that there are some inspired submissions to the consultation! Good luck!
jombaston
01/8/2017
11:37
@Jombaston - how do you see it playing out after the consultation period? I'd say leasehold for houses is dead - but hard to tell if anything retrospective is going to come out.
spectoacc
01/8/2017
10:31
This isn't news. It was originally announced in April. They will pay freeholders to renegotiate leases but they are talking about 10-year doubling leases. It is relevant in the sense that they are accepting responsibility. If more builders follow this would clearly be welcomed by the government. As for now, the press are busy recycling the old articles that no-one was interested in a few months ago!
jombaston
01/8/2017
08:19
Not looked in detail at TW's results this morning but appears they've taken a £130m provision for leasehold redress - some relevance for GRIO.
spectoacc
31/7/2017
15:29
Yes poacher45 Alpha Real-ARTL is a better buy in my opinion.According to a call I made to them last week they don't have any controversial doubling ground rents within the 20% ish they hold in their ground rent portfolio.
davebowler
31/7/2017
12:47
Must be some degree of "buyer beware" to this leasehold scam. Letter in the Sunday Times from someone with a Taylor Wimpey leasehold house, 125 year term, £250pa ground rent, doubling every 10 years (which they say they knew nothing about). They bought from someone who'd bought from TW (ie 2nd owner) so no access to TW's redress scheme. But who on earth buys a house leasehold, with less than 125 years to run? A flat, 999 years on a peppercorn, fair enough. And that's before you get to £250pa turning into £500pa, £1kpa, £2k, £4k, £8k, £16k, £32k, then £64k, per annum, from year 80. At which point you've only got 45 years remaining! You'd have to pray for some serious inflation in the next 80 years. Without redress/changes, these places will be less than worthless - or rather, will revert to the freeholder many years before the lease is up. Does a bank holding a repossessed property have to pay the ground rent? I've no idea. Impossible not to see the terms getting changed, even retrospectively. Sajid Javid on record as saying the correct level for ground rent is in many cases zero. That's irrespective of it being a 10 year doubler, a 25 year doubler, or simply inappropriately leasehold. Will see what the consultation period brings, but I'm struggling to see why any house should be sold as leasehold. Flats, fair enough, assuming the terms are fair, but otherwise it just looks like a money-spinning con.
spectoacc
31/7/2017
08:22
Nothing I read in the press at the weekend made me think GRIO is a buy yet (re leasehold rather than specific to GRIO). Might revisit after this 8 week consultation period is up.
spectoacc
28/7/2017
14:08
I am afraid that their latest buys just do not seem like bargains to me. Unlike the trust that Alpha real estate has invested in where the income just keeps going up. Why is the dividend down this year?
poacher45
28/7/2017
12:41
poacher (post #94) - the Northumberland site is minuscule (£200,000) and the yield is indexed but the loan is fixed. probably neutral over five years. Maybe they reckon they have a bargain? Loan interest can normally be offset against tax Though no tax is paid on rental income, they do appear to pay tax on other things. I don't know how this is accounted for, but maybe you do?
jonwig
27/7/2017
17:23
My finger hovered over the buy button today when the spread was 120-120.50, but I decided against it having rethought my earlier post. I do see some upside and a steady dividend, but I could not justify taking a higher risk for a lower yield than pref shares give. Unless they fall further and the yield rises, I'm out.
andyj
27/7/2017
15:56
A 25-year doubling ground rent (2.8% pa) is in line with inflation expectations. So that could hardly be described as onerous. This is from June's Citibank survey: Longer-term inflation expectations for the next five to 10 years rose to 3.1 percent, up from 3.0 percent in May but below February's 3.2 percent peak, Citi said. I guess there could be a window of a week or two to pick these up...it seems that the market is reacting to the press coverage rather than any detailed knowledge of what might happen.
jombaston
27/7/2017
15:48
I think the fall has been overdone but they recently took an 18 million loan at 3.37%. I then find they have bought a student ground rent in Northumberland yielding 3.10% and to me that is stupid. Perhaps somebody will enlighten me.
poacher45
27/7/2017
14:51
It was one-way trade for most of yesterday and this morning. Some buyers are featuring now.
jonwig
27/7/2017
14:50
Jombaston - altering existing leases might have a read-back to previous leaseholders. In GRIO's case it shouldn't, as none are of the 10-yr type. sikh - that's their problem, and I think certainly not GRIO's. If the govt allowed 10-yr doubling on shared-ownership they deserve to be sued, yes.
jonwig
27/7/2017
14:06
The irony is that most(not sure how many?) of the newly built homes have been sold through 'shared ownership schemes' developed by the government... All leases would have been checked and explained by the buyer's solicitor, so it's not like you're buying ppi or bucket and spade - I've seen both analogies... The real irony is the govn promote the 'shared ownership scheme' and clearly state that all shared ownership properties are leasehold... Maybe the government should be compensating the 'shared ownership scheme' buyers.. "With Help to Buy: Shared Ownership you can buy a newly built home....Shared Ownership properties are always leasehold." https://www.helptobuy.gov.uk/shared-ownership/ 'sausages and buckets and spades' https://www.ft.com/content/d6d223ae-7143-11e7-93ff-99f383b09ff9
sikhthetech
27/7/2017
13:44
https://www.gov.uk/government/news/crackdown-on-unfair-leasehold-practices Worth reading the original material from the govt website. There is now an eight-week consultation period - there is a link to the document on this website. The govt have more of an idea as to what to do with new leases. What to do with existing leases is a more difficult problem, but there are looking for suggestions. 'The Government recognises the challenges faced by existing leaseholders with ‘onerous’ ground rents. We are very keen to hear views on what steps could be taken to improve the situation of these leaseholders, which could include steps to tackle unreasonable and onerous rises in the future and strengthen the rights of consumer redress from unfair trading practices.' p.19 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/632108/Tackling_unfair_practices_in_the_leasehold_market.pdf We will hear more over the coming weeks but, in terms of existing leases, I suspect the obvious steps could be to limit increases in rents to inflation and make it more difficult (but not impossible) for freeholders to evict tenants for non-payment. I am looking for an opportunity to buy. The question is have we reached the point of maximum panic or are we just getting there?
jombaston
27/7/2017
12:00
What do you see as the dangers Specto?
andyj
27/7/2017
11:55
I agree Jonwig, at around a 10% discount to the estimated adjusted NAV, it is surely in oversold territory, given the low risk attached. Indeed once this news is fully written in and no longer news, I would anticpate a slow upward creep, closer to NAV. That, and the safety of the 3.3% div make this a very attractive investment IMO.
andyj
27/7/2017
11:53
Personally I'm surprised they thought a £5.5-£6m drop in NAV, when the new rules only apply going forward, and they say no exposure to the worst of the doubling ground rents, and that c.£6m is on only 18% of the portfolio. But I still think there's dangers going forwards, & what's very clear is the whole "compare us to govnt bond yields & linkers" business case is looking ropey. Totally safe they are not, and I'm unconvinced the current yield is anywhere close to justifying the potential risk. In their defence - they're still 10p above 18 month low.
spectoacc
27/7/2017
11:24
Bargepole territory until all this Ground Rent scandal is resolved legally
analyst
27/7/2017
11:22
This from the H1 report: Although the Company does not have an exposure to perpetual 10-year doubling ground rent, as per the 12 June unaudited Net Asset Value (NAV) announcement, the Directors believe that the Company's wider portfolio of doubling ground rents (18% of the portfolio capital value) may now be worth approximately £5.5 to £6.0 million less than as at 31 March 2017. This would lead to a NAV per share of approximately 132 pence, still slightly higher than the previous calculated NAV as at 30 September 2016. We continue to carefully monitor this part of the market. They do have 25-yr doubling, but that works out at 2.8%pa. I suspect the fall is overdone.
jonwig
27/7/2017
11:00
According to BBC the proposed changes only affects future sales and only in England... Current owners will need to redress via their builders/solicitors... It makes no sense to have new build single dwellings as leaseholds.... With current new builds, I expect it'll make recent leasehold new builds difficult to sell and could mean reduced house prices for those affected...the publicity is enough to make more potential buyers aware... I see none of the people affected complain when their house prices go up!! Maybe ground rents and their increases should be linked to house prices?? http://www.bbc.co.uk/news/business-40711013
sikhthetech
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