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.
View a short video from our Director of Property on why this is a great investment.
Whitewell Road presents an excellent diversification opportunity in Frome, a flourishing South West market town. These four semi-detached, three-bedroom houses are built to a high specification and within a 20-minute walk to the town’s centre. Frome railway station is less than a mile from the property, with direct services to Bath Spa in 42 minutes and Bristol Temple Meads in an hour – making this a good commuting location to major regional employment hubs. Additionally, the broader South West region is forecast to surpass national growth over the next five years.
- The investment comprises 4 semi-detached houses in Frome 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.
- There is a significant discount reflected in the purchase price of these properties, which we have secured by bulk-purchasing them at an RICS Investment Value (bulk price) of £952,000 versus the RICS Vacant Possession Value (break-up price) of the individual units of £1,032,000. Please note that future quarterly revaluations will be based on the Investment Value.
- 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 would be achieved by purchasing individual units.
- Frome is a highly desirable market town, surrounded by areas of outstanding natural beauty and host to a number of creative and cultural festivals – including the renowned “Frome Independent”. In addition, its proximity to the major South West employment hubs of Bath and Bristol should support rental and capital values going forward.
Our investment comprises 4 semi-detached 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 £952,000 for these properties versus an RICS certified Vacant Possession Value (break-up price) of the individual units of £1,032,000. 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 April 21st and completion is scheduled for approximately 5 weeks later, subject to satisfaction of conditions being met by the seller. 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 £46,800 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 1.9% and have not included any growth in rental values.
At the forecasted level of rent, Gross Rental Yield would be 4.80% and the forecast Dividend Yield 3.12% (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 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 good condition. The Chartered Surveyor's report identifies no material issues. We have set aside a contingency of £2,000 for any minor 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 semi-detached houses. Each house contains a kitchen/dining room, living room, bathroom, two double bedrooms and a single bedroom.
There is a rear garden and allocated parking available for tenants.
We present here a floorplan as an example.
- 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
- - £480,760
- 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
- - £1,144
- Gross Rental Revenue
- = £45,656
- Gross Rental Yield
- - £28,688
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £16,968
- 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 in Whitewell Road, BA11 4EH,