This publication recently interviewed the UK-based property investment specialist Temple Field on the investment outlook for country's capital.

This publication recently interviewed the UK-based property investment specialist Temple Field, a business founded by Ben Temple (the firm’s chief investment officer) and Dominic Field (chief executive) in January 2014. With all the activity going on in the UK property market, these investment professionals have had plenty to consider. Its clients are from London and Hong Kong.

Temple is a qualified chartered surveyor with specialist knowledge of the London residential property market and has been a member of the Royal Institute of Chartered Surveyors since 1992, and began his 25-year career in real estate in 1989 as a trainee surveyor with Richard Ellis (now CBRE). Temple joined Hill Samuel Property Services in 1992 as a portfolio management and property surveyor, working with the fund management team, and was appointed group estates manager for Specsavers in 1996, with responsibility for the management of circa 350 practices.

In 1999, he created Temples Clapham, to provide acquisition, project management and leasing management services to residential property investors - building a portfolio of some 200 lettings and managed properties at the point of selling the business. By this time Temples was also handling buy-to-let purchases and refurbishments, offering a range of ancillary services (including inventory and maintenance), as well as advising on, letting and handling the acquisition of commercial investments and industrial buildings.  He sold Temples in 2013 to focus on the acquisition of investments for clients, his broad ranging real estate experience complementing that of Field, and providing a solid platform for the launch of Temple Field Property.

Field, meanwhile, has 25 years’ experience in the world of property and began his career as a qualified chartered surveyor, taking up his first post in the sector with Richard Ellis (now CBRE) in 1989; it was here that he first met Temple. He joined Johnson Fry Securities as a portfolio manager and director in 1995, moving to La Salle Investment Management as a director in 2000 with responsibility for capital raising and investor relations. In 2003 Field was appointed director of the Real Estate Private Fund Group within Credit Suisse First Boston (now Credit Suisse), a position he held for more than six years, moving to Grosvenor Fund Management as business development director in 2010. In 2011 he was made a partner of real estate advisory boutique Hodes Weill & Associates, with a focus on the investment and funds management industry.

When was Temple Field established and why?
Temple Field was formed in January 2014 in order to provide a transparent and professional buying service for investors looking to invest in London residential property. By acting only for buyers and not sellers the firm can provide a wholly independent service with no conflict of interest. With a combined 50 years’ experience in real estate and a proven track record with the predecessor company (Temples) of in excess of 150 successful purchases, Temple Field offers a very high quality service in a market which is often confusing and poorly serves those looking to invest.

What is the firm's main focus? Where does it operate, and why?
Temple Field purchases flats and houses throughout London. The firm’s London focus is born out of our knowledge of London and optimism for what we refer to as the “Capital of the World”. Enormous Infrastructure improvements, a buoyant economy, including historically low unemployment and strong wage growth, as well as London being seen as a safe haven for foreign capital all contribute to London being a highly sought after, liquid and transparent market …. and hence great location for property investment.

We are very active in a specific sub sector of the market - high yielding ex-local authority property. We have had much interest from retirees, divorcees with a lump sum, the ‘Bank of Mum and Dad’ and others who are seeking relatively affordable yet high quality accommodation in London. Prices start at around £500,000 meaning that even with a deposit of only £150,000 ($224,134) it is possible to purchase a property. Yields are typically in the region of a gross 6 per cent, which is nearly double that achieved for period property.  Based on a sample of 67 properties in this category, which we have purchased over the course of the last 15 years, we believe capital growth has been very similar to period and modern property.

What sort of clients does it serve and how does it find and reach them? Is it involved in dealing, for example, with private banks, discretionary wealth firms and family offices?
Our main client base is made up of private individuals based in the UK and Hong Kong, and yes we have relationships with all the aforementioned money managers who introduce the individuals to us. Most of our instructions come through personal recommendation, although as we grow our business we are looking to market ourselves more broadly, speaking at numerous conferences and events. We actually run a three day event entitled "How to buy a property at auction".

How does Temple Field invest? Without giving away any IP, what is its methodology? How does this differ from the competition?  What is unique about it?
Each client brief is dealt with on a very individual basis; we spend considerable time really getting to understand our client - their investment goals, location preferences, budget and debt requirements. Then we approach the market, looking for a specific property for that client; we don’t present properties, as it were, ‘on our books’. In that sense, this is more of a bespoke service than off the peg!

Through our established contacts at estate agents across London, as well as the well-known agency internet portals, we try to identify a property for our client and provide a detailed financial analysis of all costs so that they can see their true gross and net yield and equity requirements to purchase and potentially refurbish the property. We hold their hand throughout the legal and financial process and organise and project manage refurbishments.

Where in the UK or abroad does it invest?
For the reasons mentioned above we focus purely on London. Whilst some regional properties show higher headline returns we believe London almost always offers fewer void periods, as well as higher quality and stronger tenant demand, and stronger capital growth potential.

As far as the markets in which you invest are concerned, what sort of forecasts and observations do you have about them?
We predict minimal growth in London residential property in the run up to the general election, but are expecting the market to bounce back quickly and strongly thereafter, as it has with previous elections. We expect the uncertainty to remain only until the end of the second quarter when the election has been decided and the ill-conceived Mansion Tax has been shelved as unworkable. Subject to the policies of the party/parties coming to power, we anticipate growth of circa 10 per cent over the course of the second half of the year, and believe the capital represents a good buying opportunity at this time for the well-advised purchaser.

London has reached a tipping point and it is difficult to see how a reversal of attention and investment over the medium to long term will take place, not least as investment is coming from such a diverse and affluent set of global institutions and individuals, each looking for a safe haven for their capital - some a location to educate, others a springboard to the rest of Europe. The dominance of London compared with the rest of the UK has never been wider, with the latest data from the Centre for Economics and Business Research forecasting that London prices will rise by as much as 54 per cent by 2020.

One strategy we advocate for those interested in an investment in London residential property is buying on the edge of pockets of expensive new build, where we can achieve excellent value and find affordable properties; we are buying two bedroom flats for clients at £550,000-£600,000, with comparable properties less than 10 minutes’ walk away selling for more than £1,000,000.

What is the most difficult part of your job and the most rewarding?
The most challenging part of the role is operating within the English conveyancing system for buying property, which is extremely slow, and these delays can often be very frustrating for our clients. The most rewarding is helping our clients achieve their investment objectives and knowing that our input has helped them get to this point.