Investors paid 48.66p per share in the New Listing for this property, and it became available on the Resale market March 30th 2016.
From the London suburb of Edgware, these three new-build flats in Premier House boast unrivalled views over the city, just minutes away from Edgware underground station. The shortage of housing in Edgware (a popular commuter location) is likely to support long-term house price growth. These properties were secured off-plan at a significant discount and are geared for enhanced returns.
- The investment comprises 3 new-build flats 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.
Edgware is a desirable location to live for young families, with numerous good schools, and a vast range of facilities at hand. This should support strong demand for housing in the area – supporting house prices and rental values. Edgware is well located for commuters. Conveniently connected via Northern Line to central London, it is only 30 minutes away from London’s financial district’s Bank station.
Edgware is favoured to enjoy strong growth in house prices, with the ONS having identified a housing shortage in the area. Edgware also benefits from substantially lower unemployment and higher average income than the national average which is bound to drive up the prices in the area.
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.
The mortgage will be provided by a major high street bank with a two-year fixed interest rate of 3.32%. 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.
Our investment comprises 3 one-bedroom flats in Premier House. By purchasing all the flats in a single transaction, we were able to offer the vendor speed and certainty of sale. The flats were acquired brand new and vacant. We have set aside a contingency of £600 per flat for any minor issues that are identified after purchase. There is also a provision of £8,280 for furnishings.
We have adopted an annual rent forecast of £43,680. 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% and have not included any growth in rental values
At the forecasted level of rent, Gross Rental Yield would be 4.19% and the forecast Dividend Yield 2.47% (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.
All 3 flats (flat 5, 11 and 13) are one-bedroom flats on the first floor, with an open-plan kitchen, living room and a family bathroom.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £443,390
- Deferred Tax
- - £8,484
- 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
- - £2,830
- Gross Rental Revenue
- = £40,850
- Gross Rental Yield
- - £26,660
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £14,190
- 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, 11, 13 Premier House, London, HA8 7BJ,