Property type:

The best property for You:

We generally provide our investors with existing property which was built some time ago where the values are lower, truer and more stable. The majority of the property which we source is below £125,000 which is below the stamp duty threshold, saving our investors 1-3% of the property value.

This means that most of the costs associated with the property can be covered by the rental income. This also means that we have access to reasonably priced finance as mainstream lenders usually require a 125% rental income to mortgage payment coverage.

To view some specific examples and video walk-throughs of the types of property that we find for you click here

Why not 'Off plan' or 'New build?':

We don’t generally build portfolios based around new build stock or off plan property in today's market. This is because of the higher prices which these properties are often marketed at, which is often not matched, certainly in the south and the Midlands, by a proportionally higher rent.

This results in a lower yield and therefore creates a situation where it is more difficult to cover mortgage payments and other costs with rental income alone. It is quite common for these properties to be priced around 10% higher than equivalent existing property with comparables.

Residential purchasers will often pay more for these properties because they can pick colours, carpets, alarm systems and nice furniture packages, and like the idea of living in something that is brand new. The reality is that none of these benefits will matter in the long term.

The differential in price between the new and existing property will smooth over time. A little like buyers of a new car, these purchasers will pay a premium for this, which would only be exposed if they tried to sell the property immediately.

This is unlikely as most investors will be holding for the long term, so the effect is masked, and the result is reduced appreciation when compared with a property which was purchased at a true market price originally.

Off plan property in our experience again adds the dimension of speculation as to the property’s value on completion.

Quite often developers will forward price property in anticipation of the market rising by the time the property is ready. A RICS valuation isn't normally carried out on these properties until completion, at which point the investor has already exchanged contracts and is committed to the purchase.

This in our opinion removes an essential level of protection for the investor. The value of properties on a new development can be difficult to assess at the moment due to the lack of comparable data for the property in that area. Existing property which has been there for many years is comparatively easy to value; you just compare it against what has sold on that street previously.

For more information about the strong UK rental market click here