You can pre-order shares until 10am on 28th June. If there are remaining shares available in the property, these will be made available through our regular live funding shortly after the pre-order period closes. Scale-back may be applied if pre-orders are oversubscribed.
As an exciting benefit on all 'New Listing' properties, you earn dividend income from the day you commit to investing (rather than waiting for the property to complete).
Our latest investment in Tonbridge represents a real growth opportunity. By agreeing to buy four houses in a single transaction, we've secured a 10.7% discount to the price of the individual houses, exceptional for the area. The exit strategy for this investment will be to break the four units, selling them individually to realise the full discount for investors. This contributes to a calculated total return of 45% over 5 years based on the lowest forecast for the area.
View a short video from our Director of Property to learn more.
- The investment comprises 4 houses plus the Freehold interests 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
- We have purchased the properties at a 10.7% discount by buying in bulk. The discount more than covers the purchase costs of 7.4% (stamp duty, mortgage fees, etc)
- This 3.3% differential is enhanced to 4.4% by gearing, after deducting all costs of purchase (including the initial Property Partner transaction fee), 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 houses individually rather than as a single investment, thereby realising the discount to Vacant Possession Value that we have secured. Freehold, independent houses in the South East of England, lend themselves naturally to individual sale, given the strength of demand from potential owner occupiers
- Leading research agencies Savills, Knight Frank, JLL and CBRE, have predicted house price growth in the South East over the next 5 years of 17%, 17%, 14.7% and 20.5% respectively. The average of these predictions is 17.3%, higher than growth forecasts for the country as a whole. Even the lowest of these forecasts, once geared by the mortgage debt, would deliver 5-year capital growth of 32% based on the break-up value of the properties. Once the dividend yield is added, this would equate to a total return of 45% over a 5-year period after deducting all costs of purchase (including the initial Property Partner transaction fee), equivalent to 8.9% per annum
- The average house price in Tonbridge is £333k, significantly below nearby Royal Tunbridge Wells (£368k) and Sevenoaks (£410k), both popular, affluent towns, an equivalent distance to London
- Both Tunbridge Wells and Sevenoaks are forecast to fall into a housing shortage within the next three years and Kent as a whole by 2022. People may well consider a move to nearby Tonbridge, a more affordable alternative, putting upward pressure on prices
Our investment comprises 4 Victorian terraced houses. 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 £1,000,000 for these properties versus an RICS certified Vacant Possession Value (break-up price) of the individual units of £1,120,000. Further, by purchasing these properties at a bulk discount, investors will benefit from a higher dividend yield than would be achieved by purchasing individual units.
Contracts were exchanged on June 9th and completion is scheduled for July 21st 2017. The resale market for this investment will launch the following business day after completion. Regardless of the completion date, investors will start accruing dividend income from the day they commit to investing in the property.
The total rent forecast for the 4 units is £45,600 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 3.8% and have not included any growth in rental values.
At the forecasted level of rent, Gross Rental Yield would be 4.56% and the forecast Dividend Yield 2.48% (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 is provided by a major high street bank with a two-year fixed interest rate of approximately 3.2%. 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 if necessary. Please refer to our blog post on geared property for further details.
The properties are being acquired in reasonable condition. We have set aside a contingency of £20,000 for any issues that are identified after purchase. There is also a total provision of £4,000 for furnishings.
This transaction was approved by our RICS qualified Director of Property.
The investment comprises 4 Victorian two-bedroom terraced houses.
Each house provides a rear garden available for tenants.
We present here floorplans for each house.
- 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
- - £505,000
- 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
- = £45,600
- Gross Rental Yield
- - £30,991
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £14,609
- 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.
4 houses on Woodside Road, TN9 2PB,