This property has been fully funded and is not currently available for investment. We are in the process of completing the purchase at which point it will move to our Resale market.
View a short video from our Director of Property on why this is a great investment.
Woodland Way is comprised of 2 modern four-bedroom townhouses in South London between Mitcham and Tooting, with a strong yield for a London location. Built to a high-specification, these properties also benefit from their proximity to Tooting Overground (0.4 miles) and Tooting Broadway Underground (0.9 miles) stations – which run direct services to Central London in under 25 minutes. The surrounding area is well-established in London’s Zone 3, and has become a high demand location for London’s professionals. Furthermore, the northern boroughs of Wandsworth and Lambeth have higher average house prices, which should support southward value migration into the area.
- The investment comprises 2 townhouses in Woodland Way, Mitcham plus the Freehold interest and is geared at 55% 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.
- There is a significant discount reflected in the purchase price of these properties, which we have secured by bulk-purchasing them at an RICS Investment Value (bulk price) of £1,234,000 versus the RICS Vacant Possession Value (break-up price) of the individual units of £1,300,000. Please note that future quarterly revaluations will be based on the Investment Value.
- 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.
- In addition to their easy commuting distance to Central London, these properties are 1.1 miles from St. George’s Hospital, one of the country’s principal teaching hospitals and a major local employer. A significant number of the 8,500 working staff are based at the main Tooting site, and have a high propensity to rent in the local area – supporting rental and capital values.
Our investment comprises 2 four-bedroom townhouses. By purchasing the properties in a single transaction, we were able to offer the vendor a fast and professional service from an experienced buyer. This, combined with our previous track record enabled us to secure a reduced purchase price of £1,234,000 for these properties versus an RICS certified Vacant Possession Value (break-up price) of the individual units of £1,300,000. Further, by purchasing these properties at a bulk discount investors will benefit from a higher dividend yield than would be achieved by purchasing individual units.
Contracts were exchanged on March 22nd and completion is scheduled to take place on or before April 21st 2017. The resale market for this investment will launch the following business day after completion. Regardless of the completion date, investors will start accruing dividend income from the day they commit to investing.
The total rent forecast for the 2 townhouses is £63,600 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 5.15% and the forecast Dividend Yield 3.56% (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 variable rate. The interest rate is confirmed at completion, but based on rates currently available, we estimate interest of approximately 3.2%. Please refer to our blog post on geared property for further details.
The properties are being acquired in good condition. The Chartered Surveyor's report identifies no material issues. We have set aside a contingency of £2,000 for any minor issues that are identified after purchase. There is also a total provision of £15,000 for furnishings.
This transaction was approved by our RICS qualified Director of Property.
The investment comprises 2 four-bedroom townhouses. Each house contains an open plan kitchen and living room, two bathrooms and four double bedrooms.
There is a rear garden and off street parking available for tenants.
We present here a floorplan for 4 Willow House, Woodland Way as an example.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Funding Target
- Share Valuation
- Purchase Price
- Purchase Costs
- Stamp Duty
- Legal & Prof Fees
- Pre-let expenses
- Repairs Provision
- Mortgage Arrangement Fees
- - £678,700
- Funding Target
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
- - £0
- Gross Rental Revenue
- = £63,600
- Gross Rental Yield
- - £38,898
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £24,702
- 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.
2 houses in Woodland Way, London, CR4 2DZ,