Investors paid 47.96p per share in the New Listing for this property, and it became available on the Resale market May 5th 2017.
View a short video from our Director of Property on why this is a great investment.
Combining the best of market town living with access to major nearby cities, this property stands apart due to its location. Set on the canal banks of Sowerby Bridge, Hammonds Landing is a freehold block of 2 houses and 8 apartments, and boasts an attractive dividend yield. Ideal for commuters craving a more picturesque setting, these properties feature natural stone-clad exteriors and high ceilings. The property is home to many long-standing tenants, a good indicator for its desirability in the rental market.
- The investment comprises an unbroken block of 10 units in Hammonds Landing, Sowerby Bridge plus the Freehold interest 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.
- Hammonds Landing is surrounded by natural beauty in a tight-knit Yorkshire countryside town and is a mere 3-minute walk to the local market. Moreover, our property is a 12-minute walk to Sowerby Bridge railway station, which provides direct services to the Northern Powerhouses of Leeds and Manchester in 45 minutes. These cities have a combined economy of c. £150bn, made up of more than 250,000 businesses – all within easy commuting distance.
- The property enjoys waterside views over a canal basin. Being man-made and height controlled, the environmental report confirms that it does not pose a flood risk.
- 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 10 units (6 one-bedroom apartments, 2 two-bedroom apartments and 2 one-bedroom three-storey terraced houses). By purchasing the properties at a bulk discount investors will benefit from a higher dividend yield than would be achieved by purchasing individual units.
The total rent forecast for the 10 properties is £55,020 per annum. The number of vacant units 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 6.59% and the forecast Dividend Yield 4.37% (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 five-year fixed interest rate of approximately 3.8%. 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. Please refer to our blog post on geared property for further details.
The properties were acquired in good condition. The Chartered Surveyor's report identifies no material issues. We have set aside a contingency of £5,000 for any minor issues that are identified after purchase. There is also a total provision of £8,000 for furnishings.
This transaction was approved by our RICS qualified Director of Property.
The investment comprises 10 properties - 6 one-bedroom apartments, 2 two-bedroom apartments and 2 one-bedroom three-storey terraced houses.
There is off street parking available for tenants.
We present here floorplans for 3 of the properties as examples.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £421,675
- 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
- = £55,020
- Gross Rental Yield
- - £33,721
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £21,299
- 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.
Hammonds Landing, Sowerby Bridge, HX6 2DR,