25th November 2009

According to Moneyfacts, the average interest on a 2 year fixed rate mortgage has fallen below 5%.  This is largely the result of the easing of inter-bank credit supply as well as revived competition between mortgage lenders as new (or returning) lenders come into the market. This is good news for borrowers as it is also leading to an easing of the general lending crieria attached to mortgages (e.g minimum income, arrangement fees, rental coverage…etc).

Supply of residential property available to rent has plummeted around 20% in the last quarter according to the UK’s Largest Lettings Chain. This news comes as the market corrects itself from drastic changes in:

1)      The availability of finance available for homeowners. With finance more difficult to obtain for want to be homeowners and first time buyers over the last 18 months, many have been left with no option but to look for rented accommodation.

2)      The Lack of new properties being built. With house builders and developers also having experienced drastically increased difficulty in obtaining suitable finance for new projects, the number of new homes produced has fallen sharply. Coupled with the current population boom in the UK, simple economic theory suggests that increased population (demand) and a falling number of new homes (supply) will cause rent (prices) to increase.

A survey carried out by Countrywide Residential Lettings over more than 200 of its’ offices found that the number of enquiries from new tenants increased by 11% in the 3 months leading to October.

Co-managing director of CRL John Hards said: “The rental market is now in the midst of a correction as the excess supply of properties brought on by the downturn in the sales market is disappearing and rental stock is coming under increased demand from the growing number of tenants. The rental market is at crossroads: the economy is fragile and unemployment is still rising. However, we are already seeing the first signs of rent increases due to strong tenant demand, and this looks set to continue.”

So long as finance remains difficult for homeowners and developers we are likely to see continued rent increases across the UK – good news for landlords while interest rates remain so low!

Alpha Property Investment

20 November 2009

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Deal Summary

• 4 Flats Available
  
• 1,2 and 3 bedrooms
  
• 25% Below Market Value
  
• Leicester City Centre Location
• Excellent Rental Market
• Cashflow positive
• New leases of 99 years

Deal Structure

The structure we have put in place enables our clients to purchase these properties at a  discount of 25%, which represents instant equity between £18,000 and £20,000. Furthermore the rental income will exceed the mortgage payments, thereby generating a monthly positive cashflow.

Here is a 2 bed example:

2 Bed Flat

Valuation:                         £75,000

Discount:                             25%

Purchase Price:                 £56,250

Instant Equity:                £18,750

Monthly Cash-flow

Rental Assessment:              £450

Mortgage  (BM 4.35%):         £204

Ground rent &Service charge £ 41

Profit                                    £205

Location

The flats are very well situated in Leicester city centre with all its amenities including shops, restaurants, bars and extensive leisure facilities. Leicester train station with direct links to London, Birmingham and Nottingham is only 400 yards away.  The M1 motorway is the gateway to London to the south as well as Nottingham, Sheffield and Leeds to the north.

The centrality and convenience of the location means there is a very buoyant rental market for these flats.

Pictures

To obtain further information about this deal,  please contact us by

E-Mail:  Info@ventispropertyinvestment.com

Phone: 0208 940 9556

Deal Summary

• 1 bedroom purpose-built flat
  
• 25% Below Market Value
  
• £32,500 Instant Equity
  
• Popular residential area in West London suburb
• Excellent Rental Market
• Very strong cashflow

Deal Structure

Valuation:                         £130,000

Discount:                              25%

Purchase Price:                 £97,500

Instant Equity:                £32,500

Monthly Cash-flow

Rental Assessment:              £700

Mortgage:                             £353

Ground rent &Service charge £ 56

Profit                                    £291

Location

The flat is located in a residential area a stone’s throw away from Twickenham and its world-famous rugby stadium.  The scnenic landscapes of the Thames riverbanks and Richmond Park are also close-by.  Central London is about 25 mins away by direct train links.

This 3 bedroom house is in very good condition and is located in a residential area a few minutes away from Birmingham town centre. It has been valued at £105,000 with an agreed purchase price of £81,000, providing £24,000 instant equity. The rental assessment on the property is £500 pcm, which will generate a cashflow of circa £170 pcm after expenses.

Deal Summary

Monthly Cashflow

• Rental Income: £500
• Mortgage at 4.79%: £250
• Management: £69
• Insurance: £10

• Net Profit: £171

Buying costs

• Finance fees: £600
• Legal fees: £600
• Sourcing fee: £1,500