Mitch Hopkinson

Mortgage enquiries from overseas buyers and British expats are up 45 per cent in Quarter 4, compared to the previous quarter, revealed the mortgages division of deVere United Kingdom and the deVere Group.

The observation from deVere Mortgages, which offers advice to British expats and foreign nationals looking to buy property in the UK, comes against a shifting political and economic landscape.

deVere Mortgages has received an unprecedented level of enquiries this last quarter.  There has been a remarkable uptick in home loan enquiries in Quarter 4 – and we’ve not yet even finished it.

To analyse these findings, first it should be acknowledged that they are more astonishing given that the government’s change in tax policy regarding Buy to Let in recent years was expected to severely dampened overseas investor interest.

Also Brexit appears not to have dented the UK’s traditional boast of being an attractive country for those residing overseas, largely due to the ongoing fundamental strengths of British residential property investments.

There are, we believe, two key drivers for the increase in Quarter 4.

With sterling down sharply since the Brexit vote, UK property has effectively put a ‘for sale’ sign up for the many overseas investors who want to establish a presence in the UK.  These might include investors simply wishing to diversify their property portfolio, or UK expats looking to buy a place to return to when they retire or to house a child while they are at university.

These investors are looking to buy now while a weak sterling works in their favour. As we appear to be increasingly moving to a ‘soft’ Brexit, sterling has already climbed in recent weeks. The more ‘soft’ Brexit the government becomes, the more sterling will rally.

Another reason to buy now is that UK sterling mortgages have probably one way to go now: up. Record low mortgage rates are being pulled as sterling funding costs go up for the banks and other lenders, reflecting the increased risk of inflation in the economy.

The vast majority of overseas buyers are foreign nationals and British expats in the Gulf Region and East Asia.

In order to meet the growing demand from both UK and overseas buyers, deVere Mortgages looks set to double its headcount of independent mortgage consultants by the end of 2017.

Mitch Hopkinson is Head of Advice & HNW, deVere United Kingdom

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IFM Correspondent

September 21, 2016: Japan’s central bank issued a plethora of changes to its policy approach but kept rate steady. The Bank of Japan (BOJ) said it would start targeting 10-year interest rates, committing to keep them around zero as part of a new policy framework aimed at stoking inflation. The bank’s move signifies its attempt to bring the economy back on track and boost prices as the existing policies failed to achieve 2% inflation in a promised two-year time frame. The bank has kept deposit rate unchanged at negative 0.1 per cent.

The BOJ eliminated the maturity range for its Japan government bond purchases and abandoned its target to increase the monetary base by 80 trillion yen a year, although the central bank said it currently plans to keep buying bonds so that the balance of its holdings increases by that amount.

Japanese stocks and the yen were down in a volatile session for Asian markets on Wednesday as investors nervously awaited the outcome of the Bank of Japan’s policy meeting.

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January 7, 2016: December 2015 marked a historic climate agreement in Paris signed by 195 countries pledging to take actions to keep global warming to under 2 degrees Celsius — the threshold scientists predict will result in irreversible warming and planetary change. The signatories of the agreement were sovereign nations, but it was broadly acknowledged that translating the agreement into action will require the ingenuity and finance of the private sector.

The private sector was more visible and active at COP 21 than in any previous COP. CEOs from industries as far ranging as cement, transportation, energy, and consumer producers stepped up their efforts to address climate change, making their own commitments to decrease their carbon footprints, adopt renewable energy and engage in sustainable resource management. Global financial institutions pledged to make hundreds of billions of investment available over the next 15 years for clean energy and energy efficiency.

Throughout the negotiations, the private sector called on governments to put in place predictable, long-term regulatory regimes, including a price on carbon and incentives for decarbonisation. They also encouraged adoption of supportive policies that could facilitate the transition.

The IFC led and participated in several high-level fora, sharing its unique experience as a global development finance institution supporting the private sector in combatting climate change.

Showcasing climate leaders from emerging markets

The private sector has an important role to play in climate finance. In fact, the private sector is the largest source of climate finance, devoting $243 billion USD in 2014 to climate-related investments, according to the Climate Policy Initiative’s Global Landscape of Climate Finance 2015. Private finance increased by nearly $50 billion USD last year, driven mainly by a record amount of new renewable energy investment in emerging markets.

The IFC showcased several of our clients from emerging markets who are climate change leaders on a panel at the Caring for Climate Business Forum at COP21. Panelists from International Housing Solutions of South Africa, Azure Power of India, Hexagon of Turkey, Solar Power Company Group of Thailand, and The Mahindra Group of India shared details of their innovative climate-smart technologies, investments, and initiatives. They shared valuable insights and perspectives on challenges and opportunities to scaling their business’ solutions in their home countries and internationally.

Growing green buildings

In the next few decades, rapid urbanisation will change the economies and lifestyles of people living in developing countries. It is expected that 70 percent of the world’s population will live in urban areas by 2050, with the biggest growth in emerging markets. Since buildings are expected to count for 30 percent of global emissions by 2030, it is critical to make the right investment choices today to push the market towards resource efficiency. In this way, we can avoid locking in high-carbon urban infrastructure and reward those who choose to develop, live and work in green buildings.

With this in mind, IFC has deployed its EDGE (“Excellent in Design for Greater Efficiencies”) green buildings program in more than 100 countries. IFC presented on the panel Mobilising the Building and Construction Sector for Climate Action at the first-ever COP Buildings Day, to make a persuasive case to divert construction financing towards green buildings. At the event, green building councils around the world made an unprecedented commitment for 1.25 billion square meters of buildings to be certified as green in the next five years. Pledges by Peru, Brazil, South Africa and the US Green Building Council identified EDGE as a solution for reaching their targets. In response to the Paris Agreement, IFC will work closely with both public and private sector clients to support them in attaining their Nationally Determined Commitments (NDCs) through emission reduction strategies in the building sector and beyond.

Scaling green bonds

COP21 re-confirmed the need to mobilize at least $100 billion per year from public and private sources to help developing countries mitigate and adapt to climate change by 2020. In this context green bonds have already proven to be an effective financial instrument capable of raising billions in climate finance. With the green bonds market having more than tripled last year to about $36 billion, IFC has to date issued close to $4.5 billion in green bonds in multiple currencies and has valuable lessons to share from its experience.

During COP21 IFC contributed remarks during the Green Finance side event at the China Pavilion, co-hosted by China’s National Development and Reform Commission and the World Bank Group. A few days later, IFC and client Azure Power opened the London Stock Exchange to celebrate IFC’s newest green bond listing.

Carbon Pricing and Markets

A price on carbon creates the foundation for carbon markets so countries and companies can reduce their greenhouse gas emissions most cost-effectively. There was great recognition of this during COP21 and furthermore, the agreement reached in Paris acknowledged that markets are needed to get countries on a low-emissions development pathway and enhance ambition to keep warming to well below 2 degrees. IFC, as part of the World Bank Group, continued to engage in this area on several fronts.

IFC supported the launch of the Carbon Pricing Leadership Coalition, a public-private initiative of over 21 governments and 90 businesses that are working together to solve the key political challenges to effective carbon pricing.

Noting the enormous need for mobilising private sector resources to meet the climate finance gap, IFC actively engaged in two other important results-based finance initiatives that have the potential to leverage considerable capital. IFC participated at the World Bank-led launch of a report with lessons learned from the first successful auction of the Pilot Auction Facility for Methane and Climate Change Mitigation and announced the details of the next auction in Q2 2016. There is much interest and demand for replicating and scaling up this innovative mechanism in other sectors, like gas flaring and abatement of nitrous oxide. The first auction that took place in July 2015 was focused on waste management and awarded put options worth more than $20 million to 12 private sector companies. As part of its work to enhance carbon markets, IFC is also supporting the design of the recently launched World Bank–led $500 million Transformative Carbon Asset Facility (TCAF), an initiative to help developing countries implement their plans to cut emissions by working with them to create new classes of carbon assets, including those achieved through policy actions. This facility will complement WBG financing and programmatic / sector approaches undertaken by IFC can also benefit.

Looking ahead

The Paris climate conference brought into sharp focus the hazards of runaway climate change. It is a fundamental threat to economic development in our lifetime and, left unchecked, could push 100 million people into poverty by 2030.

The private sector will play a critical role in building an alternative future, but it will need strong policy signals from governments, removal of exiting regulatory barriers, and creation of a stable environment in which the private sector climate investment will thrive.

There is ample momentum coming out of Paris for the private sector to increase action and ambition on climate change. Companies will be augmenting and implementing their own commitments to decarbonise. They can contribute to the national commitments made by the countries in which they operate.

IFC is ready to be a solutions provider in implementation of the Paris Agreement, by continuing to invest directly in critical climate-smart solutions across the emerging markets, mobilising billions of co-finance needed from other investors through innovative financial products, and catalyzing additional action through transformational initiatives that increase ambition in targeted ways.

In the coming months, the IFC will finalise its contribution to the World Bank Group’s Climate Change Action Plan, the mechanism by which the institution will reach its commitment to increase climate finance to 28 percent over the next five years. The goal is to strategically place finance to allow the private sector to scale up climate-smart investments. Responding to climate change is not only the right thing to do, but it also makes good business sense. —— The World Bank

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