Market Information

Case Study in Residential Property Investment

(Information provided by an Andrew Reeves group company - not considered to be a direct comparison with the Proposal but an illustration of the activities of Andrew Reeves Group Companies carried out on behalf of private clients).

A new client instructed us some five years ago to acquire a portfolio of twenty properties for him. We arranged a 60% mortgage facility in excess of £1 million at a competitive rate of interest from a Buy-to-Let panel lender, to which sum the client added more from his own funds.

Within the next six months we sought out, and identified fourteen suitable properties, (including some very "interesting" investment opportunities). We negotiated very keenly for these properties on our client's behalf, and saw each conveyancing process through to completion.

We partly-refurbished some, furnished most, and let all fourteen properties within two to three weeks of completion of purchase, at rent levels above the market average. All properties have been kept fully let over the last four years, and on annual renewal or re-letting, rents have increased by more than the rate of inflation. When we recently re-assessed the market value of the portfolio, we were able to report an overall increase in the capital value of the portfolio of 98.8% in less than five years.

Expressed as a return on our client's own funds, this amounted to a capital return of over 245% (or 49% per annum). The net rental income, after running expenses, has been more than adequate to meet the mortgage interest payments, with the excess being used to begin to repay the capital element of the loans.

The increased value of the portfolio after only two years enabled us to "re-mortgage" for the client, in order to raise a further considerable sum from the lender concerned. Using these funds as 25% deposits, we purchased a further three 2-bedroomed apartments - one in Docklands and two in London SW1 - raising a 75% mortgage on each of the new properties. The growth in value of these properties has already exceeded 80% in less than three years.

All of the foregoing was achieved with a minimum of involvement by the client, who freely admitted, at the outset, that he had little or no knowledge of property or of the lettings market.