Investors paid 47.86p per share in the New Listing for this property, and it became available on the Resale market December 16th 2016.
This property on Blanchmans road has a stand-out rental yield for the South East of England. It’s in Warlingham, a pretty commuter village in Surrey, just 35 minutes to London Victoria by train and with easy access to the M25. The building is freehold and comprises 4 one-bed flats 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 an unbroken block of 4 flats in Blanchmans Road, Warlingham plus the Freehold interest for the entire building 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 unbroken block at its investment value as opposed to its break-up value, investors will benefit from a higher net dividend yield than they would achieve by purchasing individual flats.
- The property is located 10 mins away from the village green and all its local amenities. Woldingham railway station is 1.9km away, which takes you to London Victoria in 35 minutes. An attractive area for professionals who are willing to commute to have more space, and enjoy the benefits of village life.
- 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 3.6%. 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.
Our investment comprises an unbroken block of 4 one-bedroom flats, as well as the Freehold interest for the building. 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 in good condition, and the Chartered Surveyor's report identifies no material issues. We have made a provision of £6,200 for any remedial works that further testing reveals. There is also a provision of £6,000 for furnishings.
The total rent forecast for the 4 flats is £48,600 per annum. As the number of vacant flats may vary month to month, we have factored into our forecasts an annual void rate of 1.9% for prudence.
At the forecasted level of rent, Gross Rental Yield would be 5.72% and the forecast Dividend Yield 3.82% (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 4 one-bedroom flats. All flats contain an open plan kitchen/living room and bathroom. We present here floorplans for 2 of the flats as examples.
The ground floor flats have the benefit of a garden to the rear. There is off street parking available for tenants.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £424,200
- 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
- - £0
- Gross Rental Revenue
- = £48,600
- Gross Rental Yield
- - £29,836
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £18,764
- 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.
4 flats in Blanchmans Road, CR6 9DE,