This property has been fully funded and is not currently available for investment. We are in the process of completing the purchase at which point it will move to our Resale market.
This property has a strong investment case with a forecast total return of 49% over 5 years. By agreeing to buy all ten properties in a single transaction, we’ve secured a 9.8% discount to the price of the individual units. The exit strategy for this investment will be to sell the properties individually to realise the full discount for investors.
This investment comprises 7 three-bedroom houses and 3 two-bedroom flats that are newly built and well-connected to the Northern Powerhouses. These attractive properties should have strong demand from commuting professionals. Swinton Train Station and Mexborough Train Station are both just 0.7 miles away, and offer direct access to Doncaster in 15 minutes, Sheffield in 25 minutes and Leeds in 55 minutes. The Sheffield City Region has an economy worth £30bn and boasts major international names including HSBC, PWC, Rolls-Royce, Nestle and Amazon. Meanwhile the Leeds City Region has over 109,000 companies and generates £60.5bn, 5% of England's total economic output.
View a short video from our Director of Property to learn more.
- The investment comprises 7 townhouses and 3 flats in Roman Gardens, Mexborough, and the Freehold interests. We are purchasing the properties at a 9.8% discount by buying in bulk providing a platform for above average capital growth and a degree of downside protection, in addition to the dividend
- Our exit strategy is to sell the properties individually rather than as a single investment, thereby realising the discount that we have secured from buying in bulk. Being 10 Freehold properties in a well-established location, they lend themselves to individual sale
- Leading research agencies Savills, Knight Frank, JLL and CBRE, have predicted house price growth in the Yorkshire & The Humber of 17.6%, 13.1%, 14.2% and 13.1% respectively, over the next 5 years (correct as of 17/11/2017). The average of these predictions is 14.5% and once geared by the mortgage debt would deliver 5-year capital growth of 28%, based on selling the properties individually. Once the dividend yield is added, this would equate to a total return of 49% over a 5-year period after deducting all costs of purchase (including the initial Property Partner transaction fee) and accounting for corporation tax on the capital gain, if the properties were sold at this value. The enhanced rental income promotion is paid in addition to these underlying returns
- The property is mortgaged at 50% loan-to-value (LTV) of the purchase price. The mortgage gives enhanced exposure to property price movements, and the potential for amplified returns; though investors must note amplified negative returns if prices fall. For your information, we have chosen to offer this investment on a mortgaged basis, because doing so increases the forecast 5-year total return from 34% to 49% and increases the annual yield by 0.48% p.a
Investors will start accruing dividend income from the day they commit to investing in the property. Contracts are due to exchange in the next few days with completion scheduled 5 weeks later. The resale market for this investment will launch the following business day after completion.
Our investment comprises 10 properties (7 three-bedroom townhouses and 3 two-bedroom flats) within a wider development. By purchasing the properties in a single transaction, we were able to offer the vendor a fast and professional service from an experienced buyer. This, combined with our previous track record enabled us to secure a reduced purchase price of £1,083,000 for these properties versus a Chartered Surveyors Valuation of the units if sold separately of £1,200,000. By purchasing these 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 £71,100 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 3.8% and have not included any growth in rental values.
At the forecasted level of rent, Gross Rental Yield would be 6.57% and the forecast Dividend Yield 4.12% (fully accounting for and after mortgage interest payments, purchase costs, furnishings, forecast maintenance, annual voids, corporate taxation and all fees). Since April 2016 UK taxpayers are entitled to a £5,000 annual dividend allowance. See our FAQs here for more information.
The mortgage will be provided by a major high street bank with an anticipated five-year fixed interest rate of approximately 3.80%. 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 are being acquired in good condition, and the Chartered Surveyor's report identifies no material issues. We have set aside a contingency of £12,000 for any issues that are identified after purchase. There is also a total provision of £1,000 for furnishings.
We are acquiring 10 properties and the Freehold interests.
This transaction was approved by our RICS qualified Director of Property.
The investment comprises 10 properties (7 three-bedroom townhouses and 3 two-bedroom flats) within a wider development.
There is private parking available for tenants.
We present here floorplans for 2 of the properties as examples.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Funding Target
- Share Valuation
- Purchase Price
- Purchase Costs
- Stamp Duty
- Legal & Prof Fees
- Pre-let expenses
- Repairs Provision
- Mortgage Arrangement Fees
- - £546,915
- Funding Target
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
- = £71,100
- Gross Rental Yield
- - £45,180
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £25,920
- 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.
10 units in Roman Gardens, S64 9RB,