Investors paid 55.94p per share in the New Listing for this property, and it became available on the Resale market July 7th 2016.
These 5 new-build flats are at the heart of Britain’s oldest recorded town, Colchester. The Dutch Quarter is a quaint conservation area of Tudor housing, just a short walk from Colchester station, which takes you to London within the hour. View a short video from our Director of Property on why this is a great investment.
- The investment comprises 5 out of 51 flats in this new-build 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.
- The area benefits from family friendly amenities, such as art and culture centres, green areas and education. Colchester enjoys a strong employment hub with the University of Essex Campus, Colchester Business Park and a mix of business and charity organisations including Natwest Bank and Linklaters law firm amongst others.
- The property is in Colchester, in the East of England. The well-regarded research team at Savills estimate this region to enjoy a forecast capital growth of 21% over the next 5 years (2016: 6.5%, 2017: 4%, 2018: 4%, 2019: 3%, 2020: 2%).
- 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.
You can read more on the investment case, here.
Property Partner does not provide advice and nothing in this Overview should be construed as investment or tax advice. The information which appears in this Overview is for general information purposes only and does not constitute specific advice.
The mortgage is provided by a major high street bank with a two-year fixed interest rate of 3.85%. After this two-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. We have assumed a constant cost of debt and no rental growth in our annual income forecast. Please refer to our blog post on geared property for further details.
The investment comprises 5 two-bedroom flats within a 51 flat residential block. The flats were acquired off-plan. We have set aside a contingency of £1,500 for any minor issues that are identified after purchase. There is also a provision of £9,000 for furnishings.
We have adopted an annual rent forecast of £59,400. The number of vacant flats may vary month to month. For prudence we have factored into our forecasts an annual void rate of 3.8%.
At the forecasted level of rent, Gross Rental Yield would be 4.48% and the forecast Dividend Yield 2.41% (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.
For prudence, we have not included any growth in rental values in our forecasts - any growth in rent will be incremental to our forecasts.
This transaction was approved by our RICS qualified Director of Property.
The investment comprises 5 two-bedroom flats within a 51 flat residential block. All the flats contain a living room, kitchen and bathroom. We present here floorplans for 3 of the flats as examples.
All the flats have the benefit of a balcony. There is also parking available with 3 of our flats.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £502,475
- Deferred Tax
- - £21,601
- 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
- - £6,304
- Gross Rental Revenue
- = £53,096
- Gross Rental Yield
- - £35,473
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £17,623
- 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.
5 Flats in Dutch Quarter, Essex, CO11FQ,