Investors paid 103.73p per share in the New Listing for this property, and it became available on the Resale market March 31st 2016.
We’re pleased to offer four modern flats in sought after Clapham Junction, just minutes walk from the station, and presents a strong investment case:
- The investment comprises of 4 flats plus a share of the Freehold interest of the entire building, 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.
- Clapham Junction, within the wider area of Battersea, is a neighbourhood with excellent growth potential. Adjacent to the areas of Fulham and Chelsea, it is likely to benefit by pushout from these prestigious locations. Aided by the extension of the Northern Line, the £620m development of the new US Embassy, and also the redevelopment of Battersea Power Station - the area is poised to become one of the London’s prime locations.
- Clapham Junction is one of the busiest train stations in Europe with routes from London Victoria and London Waterloo funnelling through it. Easy access to South-West and Central London makes this an incredibly convenient area for commuters.
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.
Property Partner does not provide advice and nothing in this Overview should be construed as investment or tax advice. The information which appears in this Overview is for general information purposes only and does not constitute specific advice.
The investment comprises 4 leasehold flats (2 two-bedroom and 2 one-bedroom), as well as a share of the Freehold interest of the entire building. The flats were acquired in good condition and the Chartered Surveyor's report identifies no material issues. We have made a provision of £2,400 for any remedial works that further testing reveals. There is also a provision of £2,400 for furnishings.
The total rent forecast for the 4 flats is £83,300 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 3.8% and have not included any growth in rental values
At the current level of rent, Gross Rental Yield would be 4.08% and the forecast Dividend Yield 2.28% (fully accounting for and after mortgage interest payments, purchase costs, furnishings, remedial works, 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 and has 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.
This transaction was approved by our RICS qualified Director of Property.
The investment comprises 4 purpose built flats - 2 two-bedroom flats and 2 one-bedroom flats.
There is a paved garden to the rear of the building with bike storage.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £935,846
- Deferred Tax
- - £10,360
- 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
- = £83,300
- Gross Rental Yield
- - £56,005
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £27,295
- 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.
Flats 3, 4, 5, 7 Falcon Heights, London, SW11 2PF,