PM SPV 73
Untenanted 2 Bedroom, Semi-Detached Property
About this property
- 2-bedroom semi-detached house located in Houghton-le-Spring, County Durham.
- Due to undergo a £3,500 renovation to bring the property to a current rental market standard.
- The property has been secured at £39,999 which reflects a 27.5% discount to the independent market value after the renovation works have taken place.
The property is a 2 bedroom, semi-detached property in Houghton-le-Spring, County Durham. The property benefits from double glazing, a front and back garden and a driveway. Inside, the property comprises of a lounge area, kitchen and a dining area with two double bedrooms and a family bathroom situated on the first floor. The property is due to be renovated as part of this project bringing the property to the current rental market standard we expect. Once the renovation work has been completed on this property we expect to attract and secure a tenant to occupy the property for a monthly sum of £415 per month.
The renovation work includes fitting a new kitchen and freshening up the property by painting and decorating each room. We have received written quotes for £3,500 for the work which is expected to complete within 4 weeks of legal acquisition.
The property is located close to the Elemore Family Golfing Centre and a number of surrounding local amenities which include a number of restaurants, a mini-mart and a primary school situated within a 10-minute walk. The property is exposed to a variation of public transport routes with nearby bus stops providing access to neighbouring towns and cities.
Two market appraisals carried out on the 2nd December value the property at £60,000 and £55,000 - £60,000 respectively as an asking price after the renovation works. At £60,000, this equates to the property being purchased at a discount of £16,501 (27.5%) to the open market value (£39,999 purchase price + £3,500 renovation).
The Royal Institute of Chartered Surveyors have predicted a 3% property price increase for the North East. You can see more information on our blog post HERE but please remember that property prices can go down as well as up.
There is an additional ‘Acquisition Cost’ (shown as 'Furniture Cost') which represents a finance fee paid to PMF A Ltd, and property management disbursements (auction fee, inventory, checkout, inspection, visit). This structure can provide access to new routes of property sourcing at large discounts. In addition, a monthly Accounting Fee and Corporate Governance fee of £15 and £25 respectively has been factored into the rental yield calculation (this is shown as an annual 'Service Charge' cost and represents £480 of the total).
Please bear with us while we update the names of these fields on the website. To confirm, the projected returns are net of these fees. There is no British Gas utility cover on this property, and the insurance cost of £248.15 per annum reflects the landlord insurance, which is put in place on all investments and also now benefits from a rent recovery option in the unlikely instance that a tenant may withhold payment of rent.
About the area
County Durham is an area which is experiencing investment, growth and prosperity. Companies such as Hydram Engineering, who call the likes of JCB and Mitsubishi Electric customers, already employ over 200 people in the region and plan to invest £2 million in the company in the 2016/17 financial year. This aligns with the growth of other sectors such as ResQ, the call centre that is expanding into the Spectrum Business Park to add an additional 1,200 employment opportunities to the current 670 positions they have.
The region is also home to growing technology businesses such as Atom Bank, the first exclusively digital UK bank that has chosen the North East as the new headquarters for the company and aim to host 400 employees in the area by 2020. With a recent investment of £45 million from Spanish banking group, BBVA, it is improving the fintech opportunities for future generations and is already creating synergies with Durham University by giving students the opportunity to work for the company. Due to the job opportunities available, it comes with little surprise that the North East is a popular choice for students, as evidenced by Durham University topping a student quality of life survey in 2013.