Thirlmere Deacon Property investment Magazine Issue #1 Quarter 1 2020

Issue

number

1 , Q1 2020

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a note from the ceo

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Dear all, irst of all I’d like to welcome you to

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not able to be paid as a result of current

our first quarterly magazine of 2020.

circumstances for example, are you or is

With the world in unprecedented and

your asset appealing to the biggest audi-

somewhat challenging times, I have

ence possible? From both a rental and a

written and re-written this opening over

resale point of view.

your management company insured? is

the last month due to the changing landscape. I want to say that on behalf of the

I also think it’s poignant to say that for a

entire team both in London and Dubai,

lot of investors, this is an exciting time.

we are eternally grateful for all your

I am pleased to say that this quarter has

support, engagement and most of all your

been our best quarter in the company’s

trust in these uncertain economic times.

history. A time in which borrowing is

In a time where we have seen the stock

very cheap, the GBP in its current posi-

markets plunge overnight and the forex

tion means that there are deals to be had

markets all over the place, property has

for domestic and overseas investors alike

unsurprisingly maintained as one of the

if you have a keen eye and the trusted ad-

only core dependable investment options.

vice of an expert.

Bricks and mortar, actual roofs over peoples heads are an irreplaceable ne-

See you next quarter.

cessity which is only more evident during

Stay safe and keep looking after each

a national lockdown. When all else fails,

other.

having a home, and being able to provide a home for others is a privileged yet

Best regards,

humbling position to be in.

Stuart Williams

So our advice remains the same. Buy

CEO and Founder,

well, consider your strategy. Are you buy-

Thirlmere Deacon LLP

ing under market value? If for any reason

+44 203 950 7891

growth slows or even halts, will it imme-

stuart@thirlmeredeacon.com

diately impact your strategy? If rents are

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wolverhampton city centre residences

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q1 market overview Key Developments that shaped the UK market at the start of 2020

January

ESTATE AGENTS REPORT ‘UPLIFT’ IN HOUSING MARKET

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ews reports in January focused on the increasing activity being

recorded by selling agents following the Conservative’s decisive election win

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mid-December 2019 – completed house sales in December rose for the first time in seven months.

The Royal Institution of Chartered Surveyors (RICS) conducted a survey of property professionals and found expectations had “risen sharply”.

Figures released by the Office of National Statistics suggested that UK house price was accelerating; a rise of 2.2% was recorded in the year to November 2019, up from the October figures which sat at 1.3%.

Source: BBC

THREE SNOWHILL BIRMINGHAM: 4,000 BT STAFF TO MOVE TO NEW OFFICE

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irmingham continued to prove it was an exciting investment pros-

pect with the BT Group announcing it would move more than 4,000 of its staff to their new office. Set to become a “strategic hub” for the company, the new base the Snow Hill area would see five times the number of staff previously working in BT’s Birmingham offices.

Birmingham has seen many companies choose to relocate to the city in recent years; in February 2019, HSBC opened its new headquarters in Birmingham with 2,000 members of staff.

The Snow Hill area of Birmingham is home to several large companies including HS2 Ltd, KMPG and Barclays.

Source: BBC

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BREXIT: WHAT WILL CHANGE AFTER FRIDAY, 31 JANUARY?

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they won’t be able to start until the transition period is finished. UK passports will return to being blue, the colour they were before the UK joined

n Friday 31st January the UK

the EU and the government released

officially left the European Union

around 3 million special commemora-

and entered an 11 month transition

tive 50p Brexit coins on the 31st Janu-

period. The immediate changes includ-

ary.

ed the UK’s 73 Members of European Parliament losing their seats, the UK

During the transition period, most

would no longer be automatically invit-

things will remain to operate the same

ed to EU summits and the team that

way including how UK citizens travel

handled the UK-EU negotiations – The

across countries in the EU, European

Department for Exiting the European

Health Insurance Cards will continue to

Union was disbanded on Brexit Day.

be valid and UK-EU trade will continue as usual for this 11 month period.

The next steps following Brexit include the UK setting up trade deals with countries across the world, although

Source: BBC

February

TWO-BEDS MAKE THE BEST BUY-TO-LET INVESTMENT

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he research revealed by a lettings management plat-

form showed that across England two-bedroom properties make the best investment for buy-to-let landlords in terms of rental yields.

The report also highlighted that investing in a two-bedroom property in the north of the country was a better option for maximising rental yields with the North East and North West regions seeing the highest rental yields.

Source: propertyreporter

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LANDLORDS PLAN TO EXPAND THEIR PORTFOLIO INTO THE NORTH WEST IN 2020

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nsurprisingly, due to the impressive buy-to-let credentials re-

search released in February revealed that one in five landlords planned to expand their portfolios into the North West region.

Whilst the North West region is a well-established centre for business, has a growing economy and an increasing population driving high levels of demand, property prices tend to be lower than other locations such as those in the Southeast region.

The higher than average rental yields often on offer in the North West and the potential for impressive capital growth are continued drivers for investment in the region.

HS2: WHAT IS IT AND WHAT WILL IT MEAN FOR THE NORTH WEST?

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t the beginning of February the

and reducing journey times with HS2

government gave the green light

trains operating at up to 225 mph.

for HS2 to go ahead, the high-speed rail project is set to have a positive

Northern business leaders claim

impact on many areas of the UK.

the railway is vital to boost transport links; Manchester to London jour-

HS2 is due to open in phases between

ney times cut from around two hours

2028 and 2040; the first phase will run

to just over one hour and journeys

between London and Birmingham. The

between London and Birmingham

main benefits of HS2 include increas-

being reduced from one hour and

ing railway capacity across the country

22 minutes to a mere 45 minutes.

Source: itv

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march

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NORTH/SOUTH DIVIDE NARROWS IN UK PROPERTY MARKET

REGIONAL HOUSE PRICES SET TO GROW DRAMATICALLY

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he South of England has consistently had the strongest perform-

ing property market in the country but the North is catching up.

nternational real estate agent, Jones Lang LaSalle has said that

they believe regional house prices will grow considerably over the next 5 years as the economy is re-

Research has shown that the number of

balanced away from London.

transactions taking place in the North is increasing, approaching the same

Their research resulted in a forecast

levels of property sales that are record-

predicting that Manchester would lead

ed in the southern part of England.

the way with predictions citing that the city would have the highest sales price

Outside of London, the North West

growth and rental growth. The forecast

region saw the highest level of transac-

also included impressive predictions

tions for the year up to March 2020.

for Liverpool and Leeds with both cities set for huge growth over the next half-decade.

Source: p2pfinancenews

Source: thenegotiator

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coronavirus changes

GOVT EXTENDS MORTGAGE PAYMENT HOLIDAY TO BTL

HOW WILL CORONAVIRUS IMPACT UK HOUSE PRICES – AND SHOULD I HOLD OFF BUYING A HOUSE?

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T

he government have put in place a series of measures to reduce the

impact of Covid-19 on the UK economy;

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here is considerable speculation surrounding the impact of corona-

virus on the UK property market for

a number of these have been specifical-

the most part the predictions state that

ly put together to protect renters and

it is likely to be short-lived and limited

landlords during the pandemic.

in its significance. Analysts are anticipating a ‘V-shape’ drop with recovery

Measures have included a three-

taking place fairly quickly.

month payment holiday on buy to let mortgages under emergen-

Finance professionals are highlighting

cy coronavirus legislation.

that now could in fact be a very good time to buy if you are securing lending;

Housing secretary Robert Jenrick

despite there being fewer mortgages

has said, “The government is clear

available, for those that are able to, it is

– no renter who has lost income

an ideal time to take advantage of in-

due to coronavirus will be forced

terest rates which are currently at a

out of their home, nor will any land-

record low.

lord face unmanageable debts.”

Source: ftadviser

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Thirlmere Deacon Dubai

Note from Dubai

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t’s been a great first quarter of

The highest number of buyers are

Thirlmere Deacon Dubai. Opening

coming from Saudi Arabia and Abu

the office, expanding the team, recon-

Dhabi, with the majority of investors

necting with a number of our existing

looking to invest in the North West and

clients, and being introduced to a lot

Midlands areas of the UK, with London

of new investors in the GCC region.

appetite almost falling off the edge of a cliff as savvy investors are realising that

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The feedback so far has been excep-

London requires a few years to correct

tional with more and more investors

the property prices in comparison to

leaning towards new areas for invest-

rental figures.

ment, and different ways of structuring their portfolios – mainly through mort-

Moving into Q2 we will be focus-

gage financing, and setting up corpo-

sing on introducing investors in the

rate ownership structures to take ad-

GCC region to new areas within the

vantage of the tax benefits for those

UK where yields and capital appre-

investors who are working towards

ciation are higher than many of the

larger portfolios.

major cities, but prices are still very affordable, giving investors the op-

Brexit has of course been a hot topic of

portunities to get in early before

conversation but with the continued

those cities shoot up in value.

low rate of the pound sterling, and somewhat less uncertainty around the

We are also forming partnerships with

UK’s future, more and more investors

more tax advisors and mortgage spe-

are taking advantage of this to purchase

cialists in order to provide our clients

properties are 15-20% less than before

with a full service from advising on the

the Brexit announcement was made

most suitable investment, through the

and the sterling dropped.

purchasing process including financing

of the property, and beyond to how to

investors can enter the market for as

scale and manage a portfolio in the

little as $50,000 and achieve yields

most tax efficient way.

upwards of 20% into hotel style apartments 400m from one of the most

Further afield we will be launching our

iconic beaches on the island.

latest overseas investment opportunity

Hopefully in the next update we will

off the East Coast of Zanzibar where

have some pictures of a trip there‌!

Oliver Mohsen-Taheri Senior Property Consultant Dubai oliver@thirlmeredeacon.com 971 (0) 505 063 681

Owen Moores Senior Property Consultant Dubai owen@thirlmeredeacon.com 971 (0) 562059838

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What have you heard about Zanzibar?

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Z

anzibar, located in the Indian

tion services and eateries, as well as

Ocean, about 25 miles from the

turquoise waters on the other. which

Tanzanian coast. It is characterised by

can succinctly be summed up as an

beautiful sandy beaches with fringing

Indian Ocean paradise.

coral reefs, and the magic of historic Stone Town.

Only 400 meters from the breath-taking white sandy beach, we are

The tourism sector on the island has

pleased to present The Soul, where

lately been growing by 15% per annum

Residents will be embedded into

for the last 5 years, creating an enor-

a lush tropical landscape sur-

mous demand for additional holiday

rounding a beach like a lagoon.

rooms and hotels every year. Zanzibar had around 386,000 tourists arrive in

The Soul - the new Residential Resort

2016, this figure jumped up to 538,264

on the beautiful East Coast of Zanzibar.

in 2018 and is expected to reach over

This will be the first residential devel-

728,220 in 2020.

opment in Zanzibar based on the condominium act allowing foreign owner-

This robust growth together with

ship with full investment protection of

the annual GDP growth of above 7%

the government of Zanzibar.

will drive the market for beautifully designed apartments to be built

Being developed by a fantastic team

across the entire resort which will

with a great deal of experience, de-

generate handsome returns on in-

veloping luxury holiday resorts in

vestment and appreciation of the

Zanzibar and Tanzania. They offer

capital for investors involved.

vibrant and urban communities for the growing middle class in Tanza-

Situated on the east coast of this fabu-

nia and East Africa. To add further

lous island is the very popular Paje

to this there an award-winning bou-

beach, a long strip of white sand bor-

tique hotel and luxury resorts de-

dered by a small village on one side and

veloper with fantastic reviews on

a collection of beachfront accommoda-

both booking.com and AIR BNB.

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Prices starting from USD 47,190 Located on Zanzibar’s popular East Coast holiday destination Beautifully designed to make the most of the scenery Selection of property types and sizes available Full management available to assist with letting long or short term

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the soul

Designed to embrace the tropical coastal location, The Soul allows those staying to readily enjoy scenic jungle walks, relax on the perfect powder beaches or indulge in the top-shelf entertainment.

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In focus

Locations focus WEST MIDLANDS SMALL COMMUTER TOWNS AND CITIES IN THE MIDLANDS AND WHY

Walsall Walsall is located just 8 miles from Birmingham and within two hours of

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London, for commuters looking for a or some years the trend to move to

more affordable place to live this West

London in the pursuit of a better

Midlands town is fast becoming a popu-

quality of life has been on the decline

lar choice.

and instead professionals have been 28

snapping up jobs in alternative loca-

Last year the council revealed their

tions across the country. Manchester

Town Centre Masterplan which shows

and the North West have featured

how they hope to transform the town

heavily as one such area but new loca-

centre over the next 20 years. Not

tions are emerging as popular places to

limited just to the retail areas the plans

work across the midlands.

include improvements to infrastructure and the current transport network;

In the search for ideal places to live,

enhancing train and bus stations.

there are many small commuter towns and cities in the Midlands that are

Walsall has already seen regeneration

increasingly in demand from those

and development in recent years in-

working in the likes of Birmingham,

cluding the Walsall Waterfront which

Leicester, Peterborough and even Lon-

has dramatically changed in recent

don. Equally many of these towns have

years; modern residential apartment

fast-growing economies of their own

buildings and leisure facilities have

and are becoming popular places to

been built including a Premier Inn ho-

both live and work.

tel, Light Cinema and several national chain restaurants have moved in. There

has also been considerable, success-

Redditch

ful development in the St Matthew’s Quarter retail area in recent years.

Redditch is very well placed for access to Birmingham and is set to benefit

With a long term view, Walsall of-

greatly from the arrival of HS2 and the

fers investors potential for im-

proposed growth at Birmingham Air-

pressive capital growth and steady

port.

rental yields in the meantime.

As part of the One Public Estate initiaIn the search for ideal places to live,

tive, Redditch is set to see a revamp the

there are many small commuter towns

area around the town’s rail station. This

and cities in the Midlands that are

initiative has provided the catalyst to

increasingly in demand from those

bring forward new regeneration oppor-

working in the likes of Birmingham,

tunities.

Leicester, Peterborough and even London. Equally many of these towns have

Regeneration plans for the town centre

fast-growing economies of their own

were approved by Redditch Borough

and are becoming popular places to

Council at the end of 2019, including

both live and work.

an investment plan which focused on

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four individual regeneration quarters in the town: Station and Residential, Education and Enterprise, Retail and Leisure and Public Sector and Cultural.

Just 15 miles south of Birmingham Redditch was designated a ‘New Town’ to cater to the large numbers relocating to the West Midlands; as a result, it is a very green town due to careful planning in design. This design lays the foundations for new developments, regeneration and improvement to infrastructure that will likely see Redditch become one of the West Midlands most sought after places to live in the 30

coming years.

Wolverhampton Wolverhampton is an excellent, yet

one of the fastest-growing in the UK

largely unrealised, midlands commuter

and is expected to continue on the

hotspot. With the short and easy com-

same trajectory with many projects in

mute possible from Wolverhampton

the pipeline such as the planned expan-

into Birmingham; the journey takes

sion at the nearby i54 business park

around 15 minutes, it is a prime invest-

which alone is expected to generate

ment location.

1,700 new jobs.

The wheels are very much in motion for

The currently low property pric-

the regeneration of Wolverhampton

es and strong rental yields make

with the government ready to start

Wolverhampton an obvious choice

work on a £55 million project that will

for investment; the potential for

change the face of the city centre.

the future is especially exciting.

Wolverhampton’s economy is already

EAST MIDLANDS Nottingham The city of Nottingham in the East Mid-

Nottingham presents investors with a

lands has a rich industrial history and

more established market place than

is a leading example of a city success-

neighbouring smaller commuter spots,

fully transitioning to a new, more mod-

with the expected arrival of High Speed

ern economy. Parts of the city have En-

Rail 2 (HS2) in the not too distant

terprise Zone status and are the home

future there is potential for impressive

to many new start-up businesses and

capital growth.

young professionals are increasingly choosing to make the city their home.

Known to be the capital of the East Midlands, Nottingham is a central hub for culture, shopping, leisure and sport.

The city also has two universities with over 50,000 students attending – all needing accommodation.

Nottingham has a tram network that is well used by residents and makes it easy to get around and plans for HS2 are particularly promising for the city’s connectivity to the rest of the UK. This said, only 10 minutes from the M1 motorway, Nottingham is well connected by road and there are regular direct trains to several locations such as Leeds, Cardiff, Birmingham and London; the journey to the capital taking under 2 and a half hours.

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Derby Previously wrongly overlooked, Derby is set to be pushed into the limelight with the arrival of HS2. Being so centrally located in the UK it is naturally the home of many distribution centres due to it being so easily accessible. This new fast rail link will only improve the town’s connectivity further.

There are plans for new warehous32

es to be built and expansions to existing warehouses; Aldi has just opened a ÂŁ64 million distribution centre in nearby Sawley creating 400 jobs for local residents.

Derby property prices currently remain low but have been increasing steadily and at a faster pace than other midlands locations, the announcement that HS2 is going ahead will encourage further price growth.

Yields remain to be impressively high against the UK average. With momentum picking up we’d strongly advise investors seriously consider Derby sooner rather than later to maximise the potential for capital growth.

INVESTING IN COMMUTER LOCATIONS IN THE MIDLANDS

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iming is everything. Getting in and securing property in a location

before it attracts masses of investor attention can be extremely lucrative.

Not every ‘up and coming’ location presents an equal opportunity and it is prudent for a discerning investor to take professional advice when considering these type of locations.

Our experienced team of investment advisors would be delighted to talk through the areas we believe offer the very best opportunities and properties available for investment.

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how to avoid buying a bad investment

P

roperty investment can be hugely

yield. The location of a property will

rewarding financially, purchasing a

have an impact on both these elements

bad investment can topple your success

and is a top consideration when avoid-

as an investor and can leave you stuck

ing buying a bad investment.

with an asset that doesn’t generate immediate income or have potential for capital growth in the long term – so

Attracting tenants

how do you avoid buying a bad investment?

To immediately attract good tenants a property should be located in an area

Even the most successful of property

which offers transport connections to

investors will have likely purchased

nearby places of work, have access to

a bad investment at some point, like-

amenities, perhaps be close to green

ly at the start of their venture into

space and ideally have low crime rates.

rental property. There are ways to ensure you don’t buy a bad invest-

If you’re considering a property that is

ment, key factors to consider when

the very first of its type, perhaps built

making an investment decision.

to a higher standard than other properties in the vicinity, be sure that tenants

The below highlights the top points for

have good reason to want to live there.

consideration when buying a rental property to avoid making a bad investment.

Potential for price growth For the purpose of capital growth an

Location

investor must consider the potential of an area; are there plans for gentrifica-

Those investing in property will wisely

tion should an area need it, are there

look at the potential for a blended

plans for improvements to infrastruc-

return of both capital growth and rental

ture and transport or nearby new de-

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velopments in the pipeline. These fac-

Snap decisions can result in a bad invest-

tors can help an investor determine if

ment being made, especially when the

there is strong potential for capital

figures turn out to not add up.

growth.

Firstly, committing to a purchase usually

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This said an investor needs to con-

requires immediate financial input,

sider the length of their plans for the

whilst this sum might not be extremely

property. Some areas are more ‘up

high should an investor not have the rest

and coming’ than others and might

of their finances in order to support to

take considerably longer to see their

entire purchase they could lose deposit

full potential. Whilst property pric-

monies and any expenditure on legal

es might be cheaper in an area that

work that they might have begun.

has considerable plans for regener-

As well as having finances in place to

ation it might not be 10, 15 or even

purchase a property, the structure of how

20 years before the area is estab-

the property is purchased can affect its

lished as a desirable place to live.

success as an asset. Speaking to an accountant or tax advisor regarding the

Finding the sweet spot for capital

best property purchasing structure to

growth potential can be a challenge if

suit your unique position can better your

you don’t know the local geography or

position as an investor.

have knowledge of the plans for an areas future; deciphering which are

Once you’ve conducted your research on

only proposed plans and those that will

the property and the location you will

definitely be going ahead.

have an idea of whether or not the figures add up to make the property a good investment prospect. Whilst no one has a

Check the math

crystal ball or method to predict exact capital growth understanding historic

Investors often make quick decisions to

price trends and considering any plans

avoid missing out on an opportunity,

for improvement to and area, infrastruc-

whilst this can result in great success it

ture and transport will provide an idea of

can also result in a nightmare situation.

what could be expected.

Reputable developers Buying off-plan requires an investor to commit to the developer in charge of delivering the property.

If a developer is known for meeting deadlines and delivering an excellent standard of housing an investor can rest assured they’re in good hands.

Most investors purchase property for their portfolio with the long term in mind, a reputable developer will build a property that will stand the test of time and continue to attract tenants and see continued price

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growth for many years to come.

Avoid buying a bad investment Our team of property experts can help

best developers to deliver impressive

you avoid buying a bad investment. With

investment opportunities to our clients.

so many factors to consider when looking for a good investment property, it is

If you’re considering

understandably often difficult to see the

purchasing a rental property

best opportunities available.

we can help,

With intricate area knowledge, an understanding of local rental markets and indications for price growth we can provide thorough advice to discerning investors. We work only with the very

for more information contact us on +44 (0) 2039507939 or send us an email at info@thirlmeredeacon.com.

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Investing through a Limited Company

G

etting the right legal structure set

assisting with the massive housing

up when first investing in proper-

crisis and undersupply in the UK.

ty may seem like a daunting process, but in the long run, it can save you tens

This tax change is gradually being

of thousands of pounds in tax, which is

phased in over the next couple of years,

why more and more investors these

until 2020. Up until then, landlords

days are opting for Limited Company

have been able to declare 100% of their

structures for their property invest-

mortgage interest payment as a tax-de-

ments.

ductible expense, only paying tax on the remaining balance.

Over the past few years, more and more property investors have opt-

For example, in the past, a typical buy-

ed to make their investments

to-let property would be taxed in the

through a limited company rath-

following way:

er than in their personal names.

Your buy-to-let earns 20,000 a year.

The reason for this stems back a few years to the 2015 summer budget

The interest-only mortgage costs

when George Osborne, the Chancellor

13,000 a year.

of the Exchequer at the time, thought it would be a smart move to clamp

Tax is due on the difference or profit.

down on ‘non-professional’ landlords

So you pay tax on 7,000, meaning

by hitting them with tax changes and

2,800 for HMRC (if you are a higher

restricting the limit of relief available

rate taxpayer) and 4,200 for you.

on their mortgage interest payments.

It was also seen as a way of forcing

With the new tax changes, investors

out the amateur landlords, and po-

will no longer be able to offset that

tentially making more properties

interest payment. So the same example

available for first-time buyers, thus

above would work in the following way:

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Tax is now due on your full rental in-

but the other major advantage is also

come of 20,000, less a tax credit

that the level of tax payable on the

equivalent to the basic-rate tax on the

actual profits (the remaining funds left

interest (ie 20% of the 13,000)

AFTER the mortgage payments), the rate of tax is lower than if it was owned

So you pay 40% tax on the 20,000

in your personal name.

(8,000), minus the 20% tax credit on the interest (20% of 13,000

If you’re a higher rate (40%+) taxpayer,

= 2,600), meaning 5,400 for

then there’s an even greater reason to

HMRC and 1,600 for you.

incorporate your investments, as the tax payable is only 20% on the profits

Your tax bill has just gone up by 93%!

(corporation tax – this is the tax on the company profits). Corporation tax is

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Imagine a scenario where the interest

also set to decrease over the next few

rate rises slightly… increasing your

years, bringing it down further to 17%

mortgage cost to 15,000, while your

by 2020. So you’re paying just 17% on

rent remains at 20,000.

the profits, which is a huge saving

You will have to pay 5,400 tax in this

compared to paying 40%+ on the full

scenario, so you make zero profit at all!

amount of rental income.

With limited companies, you can still

You will still be taxed on the dividends

claim your mortgage interest pay-

you receive, but there’s flexibility with

ments as an expense, and as you can

when you take these dividends for more

see in the above example, you can

tax efficiency, you can also distribute to

immediately save a few thousand

other people – perhaps family members

pounds a year by being structured

who are lower rate taxpayers, or alterna-

in this way, especially for those in-

tively leave the net profits in the compa-

vestors looking to build a substantial

ny and use those funds to keep buying

portfolio, the level of savings could

more properties and growing your port-

end up being in the tens, or even hun-

folio faster.

dreds of thousands of pounds a year.

The third major reason investors are Not only is this a huge advantage over

choosing limited companies is due to

privately owned buy-to-let properties,

inheritance tax. You can use trust struc-

tures, different types of shares, and other

work involved – you have to file an annu-

alternative ways to mitigate the level of

al return, and annual accounts with

inheritance tax paid by those inheriting

companies house – not a major stress if

your estate should you pass away.

you have an accountant who can take care of it for you. Of course, you’ll need

There are, however, some mi-

to pay them for this…extra cost, but it’s a

nor drawbacks of investing

business expense.

through a limited company.

Dividend Tax – finally, there’s the issue Mortgages – there are currently fewer

of taking the money OUT of the company

mortgages available for limited compa-

through dividends and paying tax on that.

nies than what is available for those

This is after you’ve already paid corpora-

investing in their personal name. This is

tion tax, so you’ll save some tax on the

changing slowly, with more lenders

front end, but then pay more on the back

coming to the market each year. The

end when you take it out of the company,

rates of interest are usually slightly high-

so you will need to work out which option

er when investing through a company

saves you the most amount of money.

too, so it’s worth factoring this in when doing your sums.

And the best way to do this is to speak to an accountant or tax advisor!

You will also be required to give a Personal Guarantee, or Directors Guarantee

We are not a specialist advisor but can

– essentially agreeing that if the compa-

pass you on to a number of advisors who

ny was struggling to repay the mortgage,

are currently assisting many of our cli-

then you as the Director of the company,

ents, so get in touch today for more

agree to repay the mortgage. So although

details to ensure you are getting the right

the company is called a ‘Limited’ compa-

advice, and setting up the right structure

ny…the same level of risk applies to if

before making any decisions on invest-

you owned the property in your personal

ments.

name. Think of it as a ‘tax wrapper’ rather than an entirely separate entity.

*It is strongly advised you seek professional tax advice regarding investing

More paperwork – as you are running a

through a limited company structure as

company, there is, of course, more paper-

we are not qualified to give tax advice.

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43

MEET THE DEVELOPERS

Andrew Ward Managing Director of Solomon New Homes

Driven and creative generator of UK & International Real Estate opportunities.

Solomon Investment Partners is a new, UKbased sales arm of Solomon New Homes International (SNHI) – one of UK’s best established property wholesale companies.

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Paul Rothwell Managing Director of Empire Property Concepts

With many years experience in property investing, Paul creates attractive and successful property investments for both his personal and client portfolios.

Empire aims to build strong relationships with investors looking to profit from the current property market and create a recognisable brand which is synonymous with quality.

W

hen investing in property, the

Thirlmere Deacon sat down with the

scope of a development runs far

property developing duo at Empire’s

deeper than bricks and mortar alone.

head office in Doncaster. Like many

Who is behind the project, their experi-

other British towns and cities, Don-

ence, intention and overall vision all

caster has suffered a decline in the

play a part in the ultimate success of

high street due to changes in the way

the build. With a basic investment, the

we shop, not to mention Brexit un-

only information shared about a build

certainty. Where industry and thriv-

is its location, cost and completion

ing retail outlets once stood, now sits

time. At Thirlmere Deacon, we’re inter-

empty units that are a blot on the local

ested in the 360 experience. After all,

landscape. However, as Paul and An-

that’s exactly what the final develop-

drew have both demonstrated with-

ment will be viewed in.

in their vast portfolios, where these empty and often iconic buildings once

We’ve travelled around the country to

stood lies vast untapped potential.

meet the players who perform truly breathtaking transformations of some

The headlines here are stark. According

of Britain’s most unlikely spaces. This

to Doncaster Free Press, 18,000 new

time, it’s the turn of two prominent

homes need to be built in the region to

developers whose builds feature heavily

meet demand. Nationally, this figure

throughout Thirlmere Deacon’s portfo-

stands at 250,000. While the financial

lio. Andrew Ward is the Founder and

markets have witnessed volatile uncer-

Managing Director of Solomon New

tainty in recent decades, what’s re-

Homes with offices in London, Cheshire

mained constant is the fundamental

and Dubai. Working together with

need for more accommodation to house

Andrew is Paul Rothwell, Managing

a growing population. As a result, prop-

Director of Empire Property Concepts,

erty continues to be a lucrative asset to

who specialise in repurposing previous-

invest in across the country. The de-

ly redundant spaces that sit in the heart

mand is so strong, it’s seemingly un-

of the UK’s towns and cities, turning

fazed even by the recent Brexit uncer-

them into modern residential apart-

tainty. As Andrew puts it, Solomon New

ments.

Homes has “never been busier”.

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46

Paul echoed this sentiment with-

direct rail link to London. After pur-

in his own findings, as he explained:

chasing Danum House for £930,000,

“The last three years have been quite

the 78 completed apartments Empire

uncertain in terms of the product that

created in the former retail space are

we produce. The lettings market al-

set to gross £9.3 million between them.

ways has remained strong because the

As Paul explains, such a development is

underlying factor is that people need

a huge boost for the area, and can

places to live. If you produce good qual-

actually help reverse the cycle of town

ity accommodation - which we pride

centre decline, because the influx of

ourselves on doing - then you’re al-

residents boosts the demand for local

ways going to have your units let.”

amenities, ironically including retail.

He added how local authorities “wel-

So what exactly makes a great property

come such developments with open

investment in these challenging times?

arms”, because “we’re effectively regenerating a building in a town centre.”

Paul put emphasis on the fact that places such as Doncaster have “many

Another success for Paul was Globe

unused buildings that lend themselves to

Works Mill in Bolton. While Paul ad-

conversion.” He added that Empire

mitted the 1880s industrial building

“specifically target and seek out those

“came with its inherent issues”, the

types of buildings because you bypass a

finished product which includes a

lot of the planning process and eliminate

quirky mix of loft-style apartments, is

a lot of the planning risk.”

on course for huge success. The building cost £1.7 million to purchase and is

Specifically, Paul chooses central loca-

set to make a gross profit of £24 mil-

tions within town and cities because he

lion. The 150 high-spec apartments

finds tenants “want to live in apartments

Paul’s team created includes a range of

in and around the town centre.”

luxury amenities such as a cinema,

A recent success story for Paul and

swimming pool, relaxation area, exer-

Thirlmere Deacon alike that followed

cise room and concierge service. De-

this model was Danum House. The

spite its mod cons, carefully curated

1930s Grade II listed property is just a

threads depicting the building’s indus-

stone’s throw from Doncaster town

trial heritage remain throughout, in-

centre, which also boasts a 90-minute

cluding exposed brickwork

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and copper fixtures. The fusion of old

Keen to know what is next on the hori-

with new to satisfy ‘generation rent’ -

zon for the pair, Paul told us “Wolver-

who usually consist of young profes-

hampton has been a massive success.”

sionals - is a trend Andrew is noticing

Empire purchased the Churchside

within Solomon New Homes’ develop-

development in the West Midlands city

ments elsewhere in the country too. As

for 4.25 million, with an expected

he rightly points out,

gross of 14m across the 144 stunning, high-end apartments the Empire team

“young professionals don’t necessarily

created. He added: “We’ve sold virtually

want to be in a two-up, two-down Corona-

half of the building in the last two months

tion Street house”, instead, Andrew says

which is the most successful launch that

“they want to be in a smart new pad with

we’ve had.” The Churchside develop-

integrated appliances and all of that

ment is close to the university adding

great stuff.”

potential interest to students as well as young professionals.

As developers, the satisfaction not only 48

comes from developing these modern new homes but also the large potential yields. Andrew

Things are looking bright for Andrew

“Young professionals want to be in a smart new pad with integrated appliances and all of that great stuff.”

projects currently in the pipeline. He is particularly

describes the model as “trailblazing”, adding:

too, with three

excited about one upcoming project in the north, telling us:

“The locations that Paul chooses to develop and we work on, for me, that’s probably

“We’ve got a fantastic development in an

the most exciting aspect about the oppor-

area called Rawdon which is close to

tunity for us. Buying into areas that are

Leeds Bradford Airport. It’s a really,

maybe 20%-40% behind what the true

really nice area - the sort of area that

value should be, and getting in at this

people aspire to live in.”

early stage, that’s the beauty. The rental yield is fantastic, but the true value, I

Looking to cater to those on the first

believe, is what the properties are going

rung of the property ladder, Andrew

to be worth in three, five, ten years time.”

added: “if you’re a younger first-time

buyer and you live in Rawdon, you’re probably not going to be able to buy. So this is an opportunity for people that want to stay within the Rawdon area. So I’m really excited about that.”

There’s no doubt that investing in some of Britain’s most unloved buildings is a gutsy move. Fundamentally, in the case of many of these spaces, it can be argued that they fell out of use in the first place because the company stopped listening to the consumer about what they really wanted. In the case of Andrew and Paul, their strategy as property developers is the exact opposite - in that they aren’t resistant to change.

49

Instead, the pair are bringing sleek, affordable homes to areas that are in desperate need of not only housing but regeneration too.

By retaining the beauty of the old with the futuristic vision of the new, such developments are breathing new life into our towns and cities, giving hope and life where desolation once stood.

As investors, being able to buy a building for a tiny fraction of what it will sell for, at the same time as regenerating

Here at Thirlmere Deacon, it’s no un-

forgotten spaces while improving the

derestimation when we say we’re truly

lives of communities is a complete

excited to see Andrew and Paul’s next

win-win for all involved.

move.

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Property updates

Development Construction Updates NATEX STUDENT RESIDENCES Current: - Block A foundations are complete.

- Thomas Contracting are well on with block B foundations which will enable block B steel work to commence 16th 52

March 2020.

- The steel work’s to phase one of block A, up to the 12th Floor is on target to finish by the end of March 2020.

- The steel floor decking is now on site and being loaded out as the steel frame progresses on site.

- The metal deck and concrete floors are planned to be installed from the end of the month, following which the steel work to block A (levels 13 – Roof) will be installed.

- Vehicle access is now available from both Wilde Street & Fraser Street, allowing multiple work faces to be

progressed at the same time. Pedestrian access remains from Fraser Street.

- The Fraser street hoarding has now been moved into road to create a loading zone for steel deliveries.

- The pre-cast concrete staircases on block A are now installed to level 12.

- J-Safe edge protection is now being installed as the steel frame progresses on site.

Planned: - A mobile crane has been preferred for the erection of block B with a mobile tower crane returning to complete the upper levels of block A (levels 12 - Roof).

- Block B steel work will commence on Monday 16th March 2020.

- The sample facade cladding panel has been erected and approval is being sort from the architect and planners.

- Phase 3 of the steel floor decking packs are to be loaded out on block A. - Handrail edge protection is to be installed to the pre-cast staircases - The concrete floor slabs will commence at the end of March 2020 - The facade works are being programmed and will commence at the end of April along with the mast climbers and hoists.

- Thomas Contracting will finish the remaining foundations (to the link) and start the installation of the drainage.

53

Latest from the site...

W

e are pleased to report positive feedback from a meeting in Feb-

ruary with the council planners. Prosperity were on track to feature within the scheduled items on Birmingham City Council’s planning agenda in April.

Obviously alot has happened in the last 7 days and we have been advised that everyone at the council is working from home due to the COVID-19 pandemic.

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How this affects their committee meeting schedule is yet to be clarified. Notwithstanding this fact, we remain on track to feature at the next formal planning committee hearing.

SHERWOOD SQUARE Phase 1 // nearing completion.

Phase 2 // on schedule with second

Phase 2 is water tight with inter-

floor construction underway

nal work ongoing. Juliet balconies were installed in February.

Phase 1 // Kitchens installed and interior fit-out happening.

Phase 1 // work progressing well with internal fit outs now underway

Phase 2 is water tight with internal work ongoing.

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REGENT PLAZA UPDATE Works Completed:

- Ongoing fabrication of reinforcement

- Site levels, across the whole of Block

caps, to be placed into excavation, for

B and partial Car Park footprint, have been brought to the foundation levels and all piles exposed and trimmed to

cages for all ground beams and pilepouring of concrete and placing of holding down bolts.

the cut off levels on all four elevations.

- Concrete cubes are being made and

- All piles have been integrity tested, all

sure compliance with the current stan-

stored for 7 and 28 day testing to en-

with satisfactory results.

dards.

- Lightning protection measures have

- The drainage work, including man-

been installed and fixed to pile rein-

holes and pipes, have been set out on

forcement in 17 locations.

site in readiness for excavation of

- Reinforcement, for pilecaps and

concrete manhole rings.

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trenches and installment of pipes and

beams, have been fabricated and placed elevation and Oldfield Road elevation.

Planned Works in the Next Period:

- Concrete has been poured for beams

- The rest of the reinforcement

and pilecaps along Duncan Street, with

will be fabricated to make the cag-

holding down bolts cast in for the steel-

es for the remaining ground beams

work stanchions.

and pilecaps to complete the cast-

into position along the Duncan Street

Current Status on Site: - Helix Civils Ltd are now fully opera-

ing of Block B foundations.

- The excavation of trenches for the installation of the foul and surface

tional and have made good progress on

water pipes and manholes will com-

site preparation and foundations.

mence, with pipes air-tested before and after backfilling, in accordance with the

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current standards. Simultaneously,

without the need for disruption to the

additional trenches will be coordinated

programme. The erection of the steel-

with the drainage work, for installation

work will commence upon completion

of 150mm and 100mm diameter ducts

of the foundations in April 2020.

for services to be routed at a later date

GLOBE WORKS, BOLTON

T

he sections of the building which

standard, the apartments will not now

accommodate apartments G01

be delivered in a series of phases.

to G03, 101 to 103, 201 to 203, 301 to 304, and 401 to 404 are virtually

Instead, the building will be released as

complete. The kitchens and bathrooms

a single-phase development and, upon

are installed, and the skirting and

completion, all of its leisure facilities

door frames are fitted. This section

will be available for use by residents,

of the building is scheduled for com-

rather than owners of apartments in

pletion by the end of Q2 this year.

earlier phases having to wait for the leisure facilities to be completed and

Other sections of the development

suffering the inconvenience of building

are not far behind and could be ready

works continuing around them.

around the same time or early Q3. The 58

communal areas of the building are also progressing, and the majority of apartments throughout the development now have gone past their ‘first fit’ stage and gearing up for the finishing touches.

The main section of the building and the majority of the apartments are also progressing quickly: the apartments are formed and the ‘first fit’ has been completed in virtually all apartments. However, the properties will not be ready for occupation in March as initially forecast when you reserved.

For the benefit of investors and in an effort to ensure that every buyer secures a property of the very highest

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TIVOLI HOUSE

A

s per last month’s update, practical completion

of the development was obtained on the 28th January 2020.

With the installation of the new lift car and new shaft now close to completion, we anticipate being granted access for valuations from as early as next week.

Communal entrance parts have been receiving regular attention, but with works still commencing on the 1st floor mainly, final work such as new entrance

60

door system, industrial clean, flooring and floor polishing to the stairwell will follow soon after the remaining apartment works have been completed.

On the 2nd through to the 4th floor of the building, the construction team are working through final ‘snagging’... remedying a list of minor defects or omissions in the building works prior to completion.

On the 1st floor, kitchens have been installed; bathrooms have been tiled; bathroom suites installed; and carpet underlay laid. Once the final phase of decorating has been completed, carpets will be laid and any ‘snags’ addressed.

Build progress Scaffolding has been erected in the building’s lift shaft, ready for the installation of a new lift car which will take place over the course of the next few weeks.

During the course of the next week or so, flooring will be completed in the communal areas of the 1st floor.

Elsewhere, the stairwell and communal corridors are complete.

Cleaning and polishing of the stone floors is nearly complete.

In the entrance lobby a new intercom system, which will connect to individual apartments, is in the process of being installed.

We are awaiting the imminent delivery of a new main entrance door which will be installed as soon as it arrives.

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q2 plans & events

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END OF MONTH Live stream - on the last Friday of each month.

These will be in house or on Facebook live - COVID-19 is, of course, going to determine that outcome.

Live stream will be at 14.00 PM - 5.00PM In-house will be at Lansdowne Square office between 18.30 - 19.30

30 AND > CLUB. Launching start of April as well This is catering towards our young investors who are looking to gain an interest in property investment. Heading by Stuart and Francis. Regular Friday calls to get questions answered.

EXPAT CLUB This will launched from June 1st An exclusive group geared towards our expat clients who want to have questions answered and chat amoungst themselves along with a regular live call with our Dubai office.

Stay up to date on our website and Facebook page for any changes to our events that we are running or attending.

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BREAKDOWN

// of developments on offer in Q2 //

CHURCHSIDE RESIDENCES

REGENT PLAZA

FROM £115,000 8% RENTAL ASSURANCE FOR 10 YEARS

FROM £175,959 7% NET YIELD ASSURED FOR 2 YEARS

T

L

he Wolverhampton city centre residences have easily been one of our

all-time most popular investment op-

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ocated in Manchester, one of the UK’s largest economies and the

most established investment location

portunities; investors have wisely seen

outside of London; Regent Plaza is an

the potential that a quality develop-

impressive residential development on

ment in a prime, central location offers.

the edge of the city centre.

Infrastructure is a key factor when pre-

Demand for properties such as those at

dicting the future of an investment lo-

Regent Plaza is high; Manchester’s

cation; Wolverhampton’s transport con-

workforce is continuously growing with

nections to neighbouring Birmingham

large numbers of professionals both

by rail, a journey which takes around

from other UK locations and overseas

15 minutes, already make it a natu-

relocating to the city year on year.

ral location for investors to consider.

The arrival of high-speed rail will only

The development, which will be built in

boost this part of the midlands further.

a phased program of 5 unique blocks, is set to change the city’s skyline and will

The plans for further regeneration and

have resident benefits such as a 24-

development are widespread across the

hour concierge, podium level gardens

city; Wolverhampton is a city which has

along with a residents lounge and gym.

room to grow and all the right foundations in place to support impressive capital gains for those who invest at this crucial tipping point.

BALTIC PLACE

FUMBA TOWN

FROM £112,500 7% NET YIELD ASSURED FOR 1 YEAR

FROM $199,900 8%-12% NET YIELD ASSURED FOR 10 YEARS

B

S

altic Place is located within Liverpool’s Baltic Triangle, the city’s

Creative and Digital quarter and easily

pread over 150 acres of coastal savannah, including 1.5kms of

Indian Ocean Coastline, the Zumba

one of the most exciting, fast-growing

Town development in Zanzibar

parts of Liverpool.

offers residents impressive, modern homes set within a sustainable,

Liverpool is seeing its econo-

community-driven setting

my grow significantly supported

surrounded by stunning scenery.

by new businesses calling the city home and the increasing number

Just 15 minutes’ drive from the busy

of professionals choosing to live

centre of Stone Town and Zanzibar

there, attracted by the affordable

International Airport and within a short

yet high quality of life available.

distance of Dar es Salaam and the Tanzania mainland which can be

Designed to provide residents with

reached by either plane or ferry.

affordable yet luxurious homes, Baltic Place offers spacious urban living fin-

Timing of investment is crucial

ished to a high specification.

to monetary success over time; investors strive to find these locations and secure their assets at the ideal moment; Zanzibar currently presents one such opportunity.

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THE SOUL FROM $47,190 UP TO 20% RENTAL YIELD RETURN

L

ocated on Zanzibar’s exotic and beautiful East Coast, known for its

white sandy beaches, crystal clear sea and jungle backdrop, The Soul is a fully serviced residential-leisure facility; a destination for modern globetrotters seeking a luxury place to stay in a tropical, unspoilt setting.

Designed to make the very most of the natural surrounds, The Soul is being developed by an experienced team who

68

have an excellent track record specifically in creating luxury holiday resorts in Zanzibar and Tanzania.

With a growing tourism sector and demand for holiday rooms and hotels increasing year on year, Zanzibar presents investors with an exciting prospect.

LIV LODGES

ST STEPHEN’S HOUSE

FROM £109,900 8% NET YIELD ASSURED FOR 10 YEARS

FROM £114,300 8% RENTAL ASSURANCE FOR 10 YEARS

T

T

aking a ‘staycation’ has never been more popular and in increasing

numbers, investors are turning to holi-

he conversion of a previous office building, St Stephen’s

House is being developed by an ex-

day property investment due to the

perienced team who have been

potential for impressive rental returns.

creating stylish, high-quality accommodation for over 15 years.

The combination of the growing trend for UK residents choosing to visit other

Positioned in a leafy neighbourhood,

parts of the country on their holidays

St Stephen’s House is in an upmarket

rather than travel abroad and the

part of the popular town of Redditch.

steady rise in the number of tourists

Whilst the development offers all the

visiting the country each year – now is

perks of living in a town centre with

an ideal time to consider investing in a

the amenities on the doorstep and

holiday property.

one of the UK’s top shopping centres just a short walk away, Redditch

Liv Lodges is a collection of holiday

is located within a well-established

investment properties in idyllic

green belt meaning residents have

locations across Britain which are

ready access to the countryside.

set to offer investors incredible rental returns each year.

Redditch train station is only a short walk from St Stephen’s house and by rail, Redditch is well connected via the West Midlands network with regular and direct services into Birmingham New Street. The town is also within easy reach of the M42, M5, M40 and M6 motorways for travel by car.

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Thirlmere Deacon London info@thirlmeredeacon.com + 44 (0) 2039507939 Lansdowne House, Berkeley Square, Mayfair, London, W1J 6ER

Thirlmere Deacon Dubai dubai@thirlmeredeacon.com +971 (0) 4 818 7277 Floor 30, Oberoi Hotel, Business Bay, Dubai, United Arab Emirates