Investors paid 64.05p per share in the New Listing for this property, and it became available on the Resale market January 11th 2017.
View a short video from our Director of Property on why this is a great investment.
‘The Picture Works’ is close to the heart of Nottingham City. It’s a plush modern scheme on the site of a former photo development centre - hence the name. Extremely well connected, the property is on the main tram line and directly opposite Nottingham station, and is just a short walk to the Old Market Square. Nottingham is a strong employment hub, which will support rental demand and capital growth. The Picture Works is offered with gearing to enhance dividend yield and potential capital returns.
- The investment comprises 8 out of 128 flats in The Picture Works, Nottingham 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 they would achieve by purchasing individual units.
- The area has a strong demand for quality rental accommodation, driven by the professional talent pool created from the two well-known universities in the city.
- 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.
Our investment comprises 8 flats (2 one-bedroom flats, 5 two-bedroom flats and a three-bedroom flat) within a 128 flat block. By purchasing these properties at a bulk discount investors will benefit from a higher dividend yield than they would achieve by purchasing individual units.
The total rent forecast for the 8 units is £80,400 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 5.56% and the forecast Dividend Yield 3.75% (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 3.6%. 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. Please refer to our blog post on geared property for further details.
The properties were acquired in good condition, and the Chartered Surveyor's report identifies no material issues. We have made a provision of £1,500 for any remedial works that further testing reveals. There is also a total provision of £5,200 for furnishings.
This transaction was approved by our RICS qualified Director of Property.
The investment comprises 8 flats - 2 one-bedroom flats, 5 two-bedroom flats and a three-bedroom flat. All the flats contain a living room, kitchen and bathroom.
Six of the eights flats have the benefit of an allocated parking space.
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
- - £585,043
- 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
- - £13,698
- Gross Rental Revenue
- = £66,702
- Gross Rental Yield
- - £40,887
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £25,815
- 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.
8 flats in The Picture Works, NG2 3DT,