Investors paid 40.84p per share in the New Listing for this property, and it became available on the Resale market March 1st 2017.
View a short video from our Director of Property on why this is a great investment.
500m from Brighton Pier and Pavilion, and 300m from the beach, these three flats are a rare find in 'Kemp town', the heart of Brighton. They are also within walking distance of Brighton railway station providing an easy commute to London. There is little scope for large-scale development in Brighton, which will limit the amount of available stock and should help underpin rental and capital values going forward.
- The investment comprises 3 out of 5 flats in a converted Victorian house and is geared at 50% loan-to-value (LTV) of the purchase price. Gearing gives enhanced exposure to property price movements, and the potential for amplified returns; though investors must note amplified negative returns if prices fall.
- By purchasing the properties at their investment value as opposed to their break-up value, investors will benefit from a higher net dividend yield than would be achieved by purchasing individual units.
- The property is just 300m from the beach, and 1.1km from Brighton railway station, which takes you to London Bridge in an hour. An attractive area for professionals who are willing to commute to have more space, and enjoy summer by the sea.
- Our exit strategy is to sell the units individually rather than as a single investment, thereby realising the discount that we have secured from buying in bulk.
Our investment comprises 3 one-bedroom flats. By purchasing these properties at a bulk discount investors will benefit from a higher dividend yield than would be achieved by purchasing individual units.
The total rent forecast for the 3 units is £37,800 per annum. The number of vacant flats may vary month to month. For prudence we have factored into our forecasts an annual void rate of 1.9% and have not included any growth in rental values.
At the forecasted level of rent, Gross Rental Yield would be 5.06% and the forecast Dividend Yield 3.30% (fully accounting for and after mortgage interest payments, purchase costs, furnishings, forecast maintenance, annual voids, corporate taxation and all fees). From April 2016 UK taxpayers are entitled to a £5,000 annual dividend allowance. See our FAQs here for more information.
The mortgage is provided by a major high street bank with a five-year fixed interest rate of approximately 3.8%. After this five-year period, the interest rate will switch to a variable rate based on the bank's base rate. At that point, we will assess the situation and either continue with the variable rate or fix the interest rate for an additional period if necessary. Please refer to our blog post on geared property for further details.
The properties were acquired in good condition, and the Chartered Surveyor's report identifies no material issues. We have made a provision of £1,000 for any remedial works that further testing reveals.
This transaction was approved by our RICS qualified Director of Property.
The investment comprises 3 one-bedroom flats.
We present here the floorplans for all 3 flats.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £363,600
- Latest Valuation
Note: The estimates provided do not constitute valuation advice; it remains your responsibility to determine valuation.
The HPI is an official statistic that captures changes in the value of residential properties across England and Wales. It is published by the Land Registry, which is a UK government organisation.
Note: Past performance is not a reliable indicator of future results.
Residential property investment is a total returns product. This information is the income component only. Increasing capital values have historically driven most of the return.
- Gross Rent per year (E)
- Service Charges
- - £850
- Gross Rental Revenue
- = £36,950
- Gross Rental Yield
- - £23,155
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £13,795
- Dividend Yield
Note: UK taxpayers are currently entitled to a £5,000 annual dividend allowance. This means that the total income related tax you pay is no greater than if you were to own the property directly. Gross rent and dividends may be lower than estimated. Tax treatment depends on individual circumstances and may be subject to change in future. See FAQs for more information on taxation. The Dividend Yield assumes an investment at the Latest Valuation.
3 flats in Devonshire Place, Brighton & Hove, BN2 1QA,