MARK PEARSON, managing director, Baron and Cabot – a UK property investment company in this interview with JOSEPHINE OKOJIE, speaks on the UK property market and how Nigerians can invest in it.
Can you tell us about Baron and Cabot and the UK property market?
Baron and Cabot is a UK property investment company. We help our clients invest in UK properties. At Baron and Carbot we source properties and
go through the vast due diligence on our UK properties and use data analysis to find the best areas in the UK that our clients can invest in. We then work with international clients or UK clients to help them not only source the properties but get mortgages in England where all the deeds are in their names. For Nigerian clients, we help open bank accounts and Nigerians get lots of tax allowance in England which a lot of Nigerians do not know about, and work through the whole process to manage the project for them. We do not stop working with our clients after the purchase, we rent the property out and maximise their returns on investment.
Why is Baron and Cabot particular about Nigeria?
Historically, Singapore and Hong Kong have been the biggest markets for buying in the UK. By far, the most exciting place at the moment is Nigeria for us. We started having some clients inquire with us from Nigeria, mainly people who had friends and family in England who bought with us. This
made us partner with mortgage providers in Nigeria – GTBank, Access Bank, Union Bank, and others initially to help the clients use the mortgage with us but more recently also UK lenders. When we put out something for Nigeria, we were overwhelmed by the number of inquiries on the first day. We had a 100people asking to invest in the UK and that has scaled up. Nigeria is by far our most important market within the global company, the fastest growing and the most lucrative for us as a company. We are also in Kenya, and South Africa, but Nigeria has the highest volume of buyers.
How long have you been working with Nigerian clients?
We have been working with Nigerian clients for three or four years but in terms of scale, it’s been 12 to 18 months where we have been doing
large volumes.
With what you have seen in other markets where you currently operate globally, what are the peculiarities in the Nigerian real estate market?
Nigeria has one of the highest inflation levels and high mortgage costs. We can get a very low mortgage rate for Nigerians in England for between 4.5percent down to 4 percent, it could be a 25 years mortgage and it is changed from every two or five years to get a lower mortgage rate. You
don’t have to use cash to buy out the mortgage to change it, you just move from one to another. There is a huge amount of protection for any client as the UK is the number one most transparent market for global real estate. Nigerians get the same amount an English client will get which helps a lot. Nigerians are one of the highest spenders in England. The UK real estate is a market that is well known in Nigeria but most of them do not know they could invest in it. The inflation level makes it attractive in Nigeria to invest in pounds and get a higher return.
Nigeria has one of the highest inflation levels and high mortgage costs. We can get a very low mortgage rate for Nigerians in England for between 4.5percent down to 4 percent
How can potential clients come on board?
You visit our website at www.baroncabot.com/africa fill in and make an inquiry and one of our staff will get in touch. We have Nigerian specialists
who are from Britain but have specialised for the last couple of years in attending to Nigerian clients. They will speak with you about a basic overview
of the UK market and give you an understanding of the type of mortgage rate you will get and how much you can borrow. Normally you need to put down a 35 to 50 percent deposit and the mortgage will pay the rest. They will talk you through exactly if you offset certain circumstances, where you should and should not invest based on your specifics, and then share a few property types that may be of interest to you. The second call then can narrow down where you will tell you the mortgage rate and exactly how much you will spend, putting you in a position where you make your decision on whether you will invest or not. The third call will have more details. We start the process with independent lawyers that check all the documents and paperwork to make sure you are protected before you put your money back.
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What is Baron and Cabot doing to support Nigerian Diasporas to buy properties in Nigeria?
We do not work with Nigerian developers at the moment. We specialise in the UK. We are investing in Nigerians in other ways by creating
jobs and allowing people to invest offshore and bring their cash back. We do not have that process for clients to invest in Nigeria at the moment. We are very strict with our structure and the investment types that we do. As a company we work on low risks investment types, that is our nature. We look at places with undefiled property and high demand with a lot of wealth and growing wealth and access to lending with low mortgage rates. Any that any market in the world matches that type we would be open to looking at it. I don’t know much about the Nigerian real estate market but if it matches that we would be open to it.
What can you say about the Nigerian real estate market?
The market is reasonably strong from what we have seen. Lots of our clients are developers in Nigeria and they want to de-risk their portfolio by having investments elsewhere. Lots of people are making money from the market because the margin in the Nigerian real estate market is much larger than what we get in the UK. But conversely, we also have clients who have built investment portfolios in Nigeria and they have made money in naira but when they compare it against the dollar or pounds exchange rate, they actually would have made more money just by putting their money all in dollars or pounds. We are not coming here to say stop investing in Nigeria is not the story we want to get across or the view that we have. What we are trying to say is that if you want to de-risk your investment and look for some alternatives globally, we would give you a safe alternative and this is the story we are trying to put across at the moment.
What are your long-term plans for Nigeria?
We have some staff here already working remotely. We are looking for office space in Lagos. We were set back last year by some of the political
challenges Nigeria experienced. We opened in the Philippines and Nairobi at the time we had some setbacks opening in Lagos. We like to double our client base in Nigeria and we are planning to have our office open before the end of the year.
Is there a specific package for middle-income earners in Nigeria to invest in the UK property market?
The average investment level is between £50,000 and £100,000. The growth we have seen in Nigeria is actually from the middle to mid-upper
class who have property here and are looking for a way to protect their future in an economy they feel is well stable. What we are trying to teach people at the moment is that even if you are in Nigeria earning naira or dollars we would still get you your mortgage income because the income is based on the property income. It could be through a Nigerian bank or a British bank.
How many Nigerians have bought properties in the Uk through your organisation?
We have a minimum of fifteen a month. We are doing a minimum of £3million and £4million a month from Nigeria. We are not new to the market and
we have a process. We have a lot of clients who have been with us for a long time and are on their second and third properties. We have existing clients that have gone through the whole process. About 42 percent of our purchases are re-purchased. The deeds – property ownership will be in their names, not the bank’s name. Looking after you as a client after you buy and manage your property keeps you in contact with us and may want you to start referring or thinking about investing in another property, so that management of the property afterward is very important to us strategically.
