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"PERFECT Housewife" Anthea Turner and her husband are hoping to cash in on Chester's booming property market after buying £7m worth of apartments.

Imagine Homes, owned by Ms Turner's husband, Grant Bovey, has bought 42 of the 160 apartments being built near the town centre as part of a joint venture with a major bank. :angry:

Banks continue to back ideas/people such as this, and they show no signs of relenting :(

http://icliverpool.icnetwork.co.uk/0100new...-name_page.html

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Edit: I got my calculations wrong. New calculations follow.

The rent of £625pcm quoted in the article is presumably that of the cheapest flat, £165K. That's a gross rental yield of about 4.5%. Presumably that's a two bedroom flat. £625 is expensive, but not incredibly expensive, for a city centre two bedroom flat in Chester. For the yield to be 7.5%, which I have been advised is the kind of yield that a professional landlord would look for, the purchase price would have to be £100K.

I'm not sure that I can see this "venture" making a lot of money. If there is an oversupply of city centre newbuilds in Chester, then ...

Billy Shears

Edited by BillyShears

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Guest muttley

if one thing was to make me want a crash it'd be the possibility of these two bilious monsters going bankrupt.

:lol::lol::lol::lol:

More "I'm A Celebrity, Get Me Out Of Here" fodder.

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Maybe they're going to do a mini series "How to make a small fortune out of Property".

With the obvious answer being "invest a large one in city centre flats at the peak of the biggest bull run in history".

Time and not too much of it will tell!

Pablo Silver or Lead?

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Edit: I got my calculations wrong. New calculations follow.

The rent of £625pcm quoted in the article is presumably that of the cheapest flat, £165K. That's a gross rental yield of about 4.5%. Presumably that's a two bedroom flat. £625 is expensive, but not incredibly expensive, for a city centre two bedroom flat in Chester. For the yield to be 7.5%, which I have been advised is the kind of yield that a professional landlord would look for, the purchase price would have to be £100K.

I'm not sure that I can see this "venture" making a lot of money. If there is an oversupply of city centre newbuilds in Chester, then ...

Billy Shears

Billy, just a quick one, where is your adjustment for their borrowings, at best this would be at circa 6.5%?

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:lol::lol::lol:

The sums that they really need to worry about are the ones associated with voids. Don't be too harsh on them btw. In a few years time they'll be seen as the generous celebrity couple that donated several million to the local HA.

They bought at the peak in Dubai as well...

The 7.5% figure is supposed to include a safety margin to account for voids.

Billy SHears

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Billy, just a quick one, where is your adjustment for their borrowings, at best this would be at circa 6.5%?

As I see it (i.e. not guaranteed to be correct), if the gross yield being received is the same as the mortgage interest (adjusted to include other costs such as insurance), then the amount borrowed makes no difference to the return on investment as a percentage. If the interest on the mortgage is higher than the rental yield, which it would be at 6.5%, then the smaller the initial investment compared to the price of the property the less the return. If the rent on the £165K properties is £625pcm, and the mortgage interest 6.5%, then if they borrowed more than £115K (if the mortgage is for 69.7% of the purchase price), then they'd be in a negative cashflow situation as rent would not cover an interest only mortgage on the property.

6.5% sounds quite high. I usually do my calculations assuming a 5% mortgage. Why do you choose 6.5%?

Billy Shears

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As I see it (i.e. not guaranteed to be correct), if the gross yield being received is the same as the mortgage interest (adjusted to include other costs such as insurance), then the amount borrowed makes no difference to the return on investment as a percentage. If the interest on the mortgage is higher than the rental yield, which it would be at 6.5%, then the smaller the initial investment compared to the price of the property the less the return. If the rent on the £165K properties is £625pcm, and the mortgage interest 6.5%, then if they borrowed more than £115K (if the mortgage is for 69.7% of the purchase price), then they'd be in a negative cashflow situation as rent would not cover an interest only mortgage on the property.

6.5% sounds quite high. I usually do my calculations assuming a 5% mortgage. Why do you choose 6.5%?

Billy Shears

not often you get "buy to loot" at 5% Billy

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The amount of empty new build yuppie flats in Chester is enormous. Many seem to have been completed in the last 12 months, some were obviously delayed hoping for last years bounce which did not happen as i was watching them. They are mainly situated inbetween the station, canal and city centre.

There are plans to build another 190 on a riverside dev. near race course which have not gone up yet. Economics look grim in Chester, so IMO it looks like big trouble for these flats.

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not often you get "buy to loot" at 5% Billy

OK. I haven't been looking at BTL mortgages. This will serious effect my calculation of a property's value based on BTL. But it doesn't matter too much, as my calculations at present are typically massively under the current prices anyhow, and expensive mortgages will push it down even further. But on the other hand, what I've been doing is calculating the actual value of a house for someone who can afford to buy it outright. If I started calculating it for heavily leveraged "landlords" then there are other things that need to be considered. Such as that a landlord who has a large mortgage on a property only receives part of the return (which can become so small that it's negative) but has to pay out all of the maintenance costs, all of the agent fees, etc.They also have the downside risk that shoudl property prices go down significantly, not only can they lose all of their initial investment, but they can go on losing more money. The upside is that the landlord gets the benefit of price rises.

This morning walking into work I had a remarkably paranoid thought. Anthea Turner is a well known celebrity. If she buys a load of newbuild flats, then it will make the papers and lots of people in the lower part of the intelligence probability distribution will be very impressed. We already know that developers offer pretty big discounts to the average joe/jane in the street. Would they actually offer an even bigger discount to Anthea Turner in order to get the "buy buy buy" message into the papers with "celebrity" endorsement. Though it must be said that the number of flats bought by the Turners is a bit too high for it to be a loss-leader.

Billy Shears

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Is Anthea Turner really that much of a magnet though? I'd have thought she was a bit of a liability.

Although if she came round and cleaned like she did on Big Brother that might convince me to rent off her :D

Edited by vicster

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If you think that's bad, have a look at these (apologies for having to use files but linking to it doesnt work).

I can produce plenty more examples, including one in the second of the blocks which has just been redued to £225k.

Buy to let - you know it makes sense!

wetherby_flats_to_rent.JPG

wetherby_flats_to_buy.JPG

post-1550-1143536874.jpg

post-1550-1143537184.jpg

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If you think that's bad, have a look at these (apologies for having to use files but linking to it doesnt work).

I can produce plenty more examples, including one in the second of the blocks which has just been redued to £225k.

Buy to let - you know it makes sense!

According to the article the cost to furnish a flat is £7000 -£9000

A rental flat will need to be re furnished every 4 years ?

so that is around £2,000 PA say £150 per month off the £650 rental so thats only £500 per month return with no other costs !

The figures do not add up although i suspect they got a large discount off the builder which would help.

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Is Anthea Turner really that much of a magnet though? I'd have thought she was a bit of a liability.

Although if she came round and cleaned like she did on Big Brother that might convince me to rent off her :D

Depends on your target audience. When Viz was worth reading it frequently indulged in fairly hard-core satire of the "celebrity expert" tabloid newspaper article bit.

Billy Shears

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The amount of empty new build yuppie flats in Chester is enormous. Many seem to have been completed in the last 12 months, some were obviously delayed hoping for last years bounce which did not happen as i was watching them. They are mainly situated inbetween the station, canal and city centre.

There are plans to build another 190 on a riverside dev. near race course which have not gone up yet. Economics look grim in Chester, so IMO it looks like big trouble for these flats.

------

Coming from Chester I concur with the above. There is a huge amount of unsold/unrented flats in Chester City Centre. One development has had 'luxury apartments' (not flats) up for sale since mid-2003, and they still havm't all sold. So I think that is development and at least 3 others that I know will not sell at current prices. As ever the better quality properties (the development backing onto Grosvenor Park who's name I forget) have sold and it's the medoicre/dross that's left behind.

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Give that woman a chocolate bar. Reminds me of Marianne Faithful.

What is it about Grant Bovey that makes me want to puke. There is something about that smug arrogant grin on a cynical face that I can't fathom out.

As for Anthea, stick to Blue Peter darling, that was about your level.

They were made for each other.

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------

Coming from Chester I concur with the above. There is a huge amount of unsold/unrented flats in Chester City Centre. One development has had 'luxury apartments' (not flats) up for sale since mid-2003, and they still havm't all sold. So I think that is development and at least 3 others that I know will not sell at current prices. As ever the better quality properties (the development backing onto Grosvenor Park who's name I forget) have sold and it's the medoicre/dross that's left behind.

No here`s a thought, ever think Grant and Andrea are being used? Who financed the build of the flats? That`s right, the same bank that has backed their mortgages B)

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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