Investors paid 66.48p per share in the New Listing for this property, and it became available on the Resale market March 15th 2017.
View a short video from our Director of Property on why this is a great investment.
Carlisle Mews in Gainsborough, Lincolnshire has an exceptionally strong yield. The town of Gainsborough itself is undergoing an £18m regeneration project, which is set to create over 3,000 jobs, rejuvenate the town, and progress the Gainsborough Marina, all of which should support rental values going forward.
- The investment comprises an unbroken block of 21 properties in Carlisle Mews, Gainsborough 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 properties were acquired Freehold, allowing efficient management which will assist the strong dividend yield.
- Our exit strategy is to sell the investment as a single holding to an investor. This will preserve its value as an income producing freehold block, and ensure an efficient and timely sale.
Our investment comprises 21 properties (1 one-bedroom flat, 13 two-bedroom flats, 2 two-bedroom bungalows and 5 two-bedroom houses), as well as the Freehold title. These include 4 affordable units as per the planning approval for the original development. Rent on these 4 units is capped at 75% of their market rent, which enabled us to negotiate a deeper discount for the overall transaction and contributes to the stand out dividend yield for this property.
The total rent forecast for the 21 properties is £88,185 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 7.00% and the forecast Dividend Yield 4.64% (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 six-year variable interest rate currently at 3.50%. Please refer to our blog post on geared property for further details. As we have secured a variable rate, we are also accruing a provision as contingency should base rates rise. This will secure future dividend payments at the current level if we see modest increases in the base rate.
The properties were acquired in good condition, and the Chartered Surveyor's report identifies no material issues. We have made a provision of £1,200 per unit for any remedial works that further testing reveals. There is also a provision of £500 per unit for furnishings.
This transaction was approved by our RICS qualified Director of Property.
The investment comprises 21 properties - 1 one-bedroom flat, 13 two-bedroom flats, 2 two-bedroom bungalows and 5 two-bedroom houses.
There is off street parking available for tenants.
We present here floorplans for 3 of the flats as examples.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £595,092
- Deferred Tax
- - £617
- 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
- = £88,185
- Gross Rental Yield
- - £53,166
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £35,019
- 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.
Carlisle Mews, Gainsborough, DN21 2HZ,