Investors paid 54.83p per share in the New Listing for this property, and it became available on the Resale market November 16th 2015.
The potential for amplified returns through gearing, combined with securing these new-build houses in an area of strong forecast growth, makes this a highly attractive investment opportunity:
- The investment comprises four new-build 4-Bed Freehold houses 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.
- The property is in Hastings, a coastal town in the South-East of England. Savills, in their forecasts for house price growth by region, have this as the region of the country they expect to appreciate most in value over the next 4 years - a predicted 22.7% (2016 & 2017: 6.5% p.a, 2018 & 2019: 4% p.a.)
- Hastings has recently been named in the top five English ‘heritage assets’ in the country. The town also has a growing arts and culture scene that is making it an increasingly attractive destination and place to live.
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 for Hastings 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 mortgage is being provided by a major high street bank and has a five-year fixed interest rate of 3.99%. Please refer to our blog post on geared property for further details.
We secured these four houses, from a scheme of five, directly from the developer. The total rent forecast is £57,600 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 5.7% and have not included any growth in rental values.
At this level of rent, the forecast Dividend Yield is 2.74% (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.
We haven't included any growth in rental values in our forecasts, which is simply a precaution. However, it is worth noting that Savills forecast rental growth of +20.5% through to 2020 for the UK.
This transaction was approved by our RICS qualified Director of Property.
The layout of each of these 4 Bed houses is as follows:
The ground floor contains a combined living/dining area, a separate kitchen, a utility room, and a downstairs WC. The living/dining area has double doors that open out onto the garden.
The first floor has three bedrooms and a family bathroom.
The second floor houses a master bedroom and en-suite shower room.
Houses 4 and 5 include Oriel Bedroom Windows.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £527,725
- Deferred Tax
- - £16,597
- 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
- = £57,600
- Gross Rental Yield
- - £39,276
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £18,324
- 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.
2-5 Finch Heights, Hastings, TN35 5ED,