Investors paid 43.28p per share in the New Listing for this property, and it became available on the Resale market October 31st 2016.
Osborne Mansions, formerly the Sussex Hotel, is a recently refurbished grand Victorian block in the city of Brighton and Hove, and is a mere 200 metres from the seafront. These 3 flats from the building offer a strong yield for South-East England. London is just over an hour’s commute, so demand from professionals should be strong. There is little scope for large-scale development in Hove, which should also support capital growth. The property is offered with gearing to enhance investor returns. View a short video from our Director of Property on why this is a great investment.
- The investment comprises 3 out of 11 flats in this recently refurbished block 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 these flats at their Investment Value as opposed to their Vacant Possession Value, investors will benefit from a higher net dividend yield than they would achieve by purchasing individual flats.
- The property is less than 200m from the sea, and 1.1km from Hove Station, which takes you to London Victoria in 1hr and 5 minutes. 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.
The mortgage is provided by a major high street bank with a five-year fixed interest rate of 3.1%. 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. For prudence, we have not included any growth in rental values in our forecasts. Please refer to our blog post on geared property for further details.
The investment comprises 3 two-bedroom flats within a 11 flat residential block. By purchasing these flats at a bulk discount investors will benefit from a higher dividend yield than they would achieve by purchasing individual units.
The flats were acquired recently refurbished. We have set aside a contingency of £500 per flat for any issues that are identified after purchase. There is also a total provision of £2,000 for furnishings.
We have adopted an annual rent forecast of £39,600. 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%.
At the forecasted level of rent, Gross Rental Yield would be 4.95% and the forecast Dividend Yield 3.51% (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.
This transaction was approved by our RICS qualified Director of Property.
The investment comprises 3 two-bedroom flats on the first, second and third floors. All the flats contain a living room, kitchen and bathroom. The master bedroom has an en-suite shower room.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £377,500
- 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
- - £1,800
- Gross Rental Revenue
- = £37,800
- Gross Rental Yield
- - £22,155
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £15,645
- 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 Osborne Mansions, Brighton & Hove, BN3 2RH,