Bilal Ahmed, Founding Partner of Offa, is a hands-on property financier. Offa is the only UK bridge finance provider operating an Ethical Finance model designed in accordance with universal Islamic Finance principles. Having spent almost two decades in the property finance sector, Bilal’s experience is extensive and spans the entire life cycle, from purchase and development to refurbishment and disposal. Working across student accommodation, residential and commercial developments, Bilal understands the needs of both brokers and clients. In an exclusive interview with Asian Voice, he spoke about the spending habits of South Asians, ethical financial advice and paradigm shift in real estate during the pandemic.
What is your biggest learning about the spending habits and habitation in the Asian community?
Culturally, Asians like to spend on upgrading their home, whether that’s fabulous kitchens or extensions to create more living space. With the increase in professional and business owning Asians in society coming into wealth, it is not unsurprising that they look for a detached house with a big drive as a priority, over luxury holidays for instance. It is the same when it comes to investments such as pensions – the main investment class Asians tend to favour is property. As a result, buy to let investments (residential and commercial) are very popular.
What according to you is the future of real estate designs?
Covid-19 will change our homes because it has changed the way we live, and the way we want to live. Multigenerational living has been on the increase in 2020, with at least 12% of the UK population were adults who had moved back in with parents as a result of the pandemic, according to a survey by the personal-finance website finder.com. Increasingly university students have chosen to live at home too. The pandemic has made outdoor space become an essential for many. New-build developers and architects will need to be aware of this shift when they plan new housing developments. Alongside the need for more space, house planning will also need to consider easily adaptable spaces which could transform how people use their homes.
If you were to give one piece of ethical financial advice withstanding the monetary losses incurred by millions of people during the pandemic, what would it be?
Given where the world is today in terms of climate change, social values and the need for fairness and transparency – my single piece of advice is to be more discerning about your finances. It is no longer about determining your financial decisions purely on price – this may have untold costs on society. In addition to price, make your buying decision about the values of the firm you are dealing with. Ask questions such as where are they investing your money and will it help society and the environment? How transparent are they about fees? Is the basis of the finance fair? If everybody did this – then perhaps society would be better prepared for calamities such as pandemics and natural disasters and there would be less financial crisis’.
When is the right time to invest in real estate in the near future?
Those who got in early to the real estate market have reaped the returns. A report written in 2015 by economist Rob Thomas showed that buy-to-let returns over the previous 18 years had beaten those from every other major asset class available. Since buy-to-let mortgages were introduced in 1996, Thomas calculated that net annual returns have averaged at 16.2%, compared to a lower average return of 6.2% on UK equities. The number of people renting continues to increase, with a third of UK’s millennials who will rent into retirement. The UK has the fifth-highest number of tenant occupiers out of all 28 EU nations. VeriSmart forecasts renters will account for 55% of the housing market by 2045. Clearly the buy-to-let market is still offering good returns for investors, provided they focus on affordable parts of the UK, where there are strong yields and the potential of good capital growth.
