Our Q3 2021 performance announcements include the latest dividend changes, updated financial information on all properties and an update on property disposals.
To ensure that all clients have the opportunity to consider this announcement, the Resale Market will be suspended for 3 working days, as usual, re-opening at 10am on Tuesday, 5 October 2021.
It has been an exciting first month under Better’s ownership (read our announcement on 3 September):
- We have implemented a new fee structure, with lower fees for all clients
- Clients that have traded in sufficient volumes since 1 September 2021 will receive significant fee rebates (details here)
- We ran our largest-ever client survey to understand your views and reflect those in our plans for the future
- We are working hard on the pipeline of new properties to dramatically expand investment opportunities on the platform
All clients will benefit directly from 1 October 2021:
- AUM fee will reduce from 1.2% p.a. to 1.0% p.a.
- Dividends will increase by at least 0.2% for all dividend paying properties
- Monthly account fee of £1 will be completely removed
Within the property portfolio, the past 3 months of operating performance has delivered strong returns:
- As a result of dividend increases, the average dividend across all properties will increase from 2.1% to 2.4%
- 22 property sales completed: 7 properties that completed their 5-year anniversary sales, 4 individual units within blocks as part of their 5-year anniversary process, and 11 opportunistic sales of individual units within larger blocks
- Average total return (dividends plus capital gains) on all property disposals has increased from 5.0% p.a. to 5.2% p.a.
Today’s announcements:
1. Property financial performance
2. Dividend changes
3. Property disposals
4. Development loans
5. Properties with fire safety issues
6. Upcoming quarterly announcements
Following the surge in housing market activity in Q2, as buyers rushed to take advantage of the full stamp duty holiday, the market has returned to more normal levels of activity. UK residential transactions completed in June 2021 were 199,000, approximately double the long term monthly average. This compares to 74,000 in July and 98,000 in August. Stamp duty will return to its standard level from 1 October.
According to the ONS UK house price index, average house price growth in England over 12 months to July 2021 was 7.0%, down from 13.3% in the 12 months to June 2021. The national average masks wide variations between regions and property types, as buyers continue to seek houses with outdoor space away from city centres. For example, London flats increased in price by 1.8%, while prices of semi-detached and detached houses across England increased by 8.0%.
The 2021/22 student accommodation booking cycle has run later than in pre-Covid years, with some universities pushing back the start of term until October and courses generally starting later.
Bookings have picked up over the summer as new and returning students grew in confidence that the coming academic year will be a step back towards normality, with majority in-person teaching and an absence of major Covid-related restrictions on social interaction or hospitality. Total occupancy across our PBSA portfolio is currently at 78%, above the highest point that we reached in the previous academic year and with ongoing efforts to let additional rooms.
1. Property financial performance
As announced previously, we now update each property’s financial performance every 3 months, as part of our commitment to continually enhancing disclosure.
For each property, we report historical financial performance and the property’s net cash position. These financials can be found in each property’s ‘Financials’ section and the ‘Investment Case’ contains further discussion. The financial results disclosed include rental income, property operating and works costs, mortgage interest costs, fees paid to Property Partner, dividends, etc.
Overall, the net cash position of the portfolio is a surplus of 0.2% of property value.
2. Dividend changes
As a result of the reduction in the AUM fee, all dividend-paying properties will increase their dividend yield by at least 0.2% from 5 October 2021. Seventeen (17) of those properties will increase their dividends beyond that level (see list below).
In total, 49 of 81 eligible properties (where shareholders vote to sell at 5-year anniversary process, no dividend is paid) are now paying dividends, with an average yield of 3.9% p.a. Across the entire portfolio, including those properties not paying dividends, the average yield has increased from 2.1% to 2.4% p.a.
| Property | Asset type | Previous dividend yield | New dividend yield |
| 1. Verney Street, Exeter | PBSA | 5.94% | 6.70% |
| 2. Fairholme road, Croydon | Residential | 1.99% | 2.70% |
| 3. Norman House, Derby | Residential | 1.49% | 1.95% |
| 4. Sherringham Court, Hayes | Residential | 2.00% | 2.70% |
| 5. Blackfords Court, Cannock | Residential | 3.05% | 3.70% |
| 6. The Picture Works, Nottingham | Residential | 2.04% | 2.7% |
| 7. Sandy House, Rugby | Residential | 3.38% | 3.70% |
| 8. Stalybridge, Greater Manchester | Residential | 3.81% | 4.20% |
| 9. Barton Court, Warrington | Residential | 3.06% | 3.45% |
| 10. London Road, Brighton & Hove | Residential | 3.55% | 3.95% |
| 11. Woodland Way, Mitcham | Residential | 3.55% | 3.95% |
| 12. Hammonds Landing, Sowerby Bridge | Residential | 2.02% | 2.70% |
| 13. Fulbeck Avenue, Worthing | Residential | 2.01% | 2.70% |
| 14. Keogh House, Swindon | Residential | 1.47% | 2.20% |
| 15. Bath and Oxford Portfolio | Residential | 5.31% | 5.70% |
| 16. Sainsbury Local, Leamington Spa | Commercial | 4.52% | 5.20% |
| 17. Compass Court, Eastbourne | Residential | 3.48% | 4.20% |
All dividends are quoted after deduction of the AUM fee and as a percentage of their latest valuation.
For properties not currently paying a dividend, all net rental income accumulates within that property’s account, strengthening its financial position.
3. Property disposals
Our record of all property sales is displayed on our Selling Record. For properties not currently paying a dividend, all net rental income accumulates within that property’s account, strengthening its financial position.
For all properties that we have either sold or are deal agreed, clients have earned an average total return (dividends plus capital gains) of 5.2% p.a. after all fees and taxes.
In all cases, the shareholders in each property vote to determine whether or not a sale goes ahead.
Unit sales completed
1. Flat 48, Sandars Maltings, Gainsborough
2. Flat 41, Sandars Maltings, Gainsborough
3. Flat 5, Keogh House, Swindon
4. Flat 7, Carlisle Mews, Gainsborough
5. Flat 7, Spencer Parade, Northampton
6. Flat 5, Blackfords Court, Cannock
7. Flat 3, Stokes Mill, Stalybridge
8. Flat 6, Lydan House, Redditch
9. Flat 11, Bridgewater Street, Manchester
10. Flat 6, Spencer Parade, Northampton
11. Flat 8, Prospect Court, Market Drayton
Units under offer
1. Flat 6, Queen Street, Sheffield
2. Flat 11, Dutch Quarter, Colchester
3. Flat 54, Whitewell Road, Frome
4. Flat 27, Dutch Quarter, Colchester
5. Flat 28, Sandars Maltings, Gainsborough
6. Flat 19, Sandars Maltings, Gainsborough
7. 7 Stackyard Farm, Scarborough
8. Flat 4, Anchor Point, Surrey Quays
9. Flat 5, Spencer Parade, Northampton
Units on the market
1. 14 Golden Hill Fort, Isle of Wight
2. Flat 6, Stafford Vere Court, Woodhall Spa
3. Flat 45, Red Lion Court, Greenford
4. Flat 9, Devonshire Place, Brighton
5. Flat 6, Prospect Court, Market Drayton
4. Property development loans
Of the 16 development loans that our clients have funded, 7 have now been repaid in full with interest.
You can find the latest update on the outstanding loans on their respective investment pages here.
5. Properties with fire safety issues
The UK-wide fire safety scandal affecting high rise blocks continues. Whilst the government has taken steps to address the issues, the situation remains far from resolved. For further details on this and our 7 properties impacted, read our latest update here.
6. Upcoming quarterly announcements
- 17 December 2021 – market closed from 10am that day until 10am, 22 December 2021
- 31 March 2022 – market closed from 10am that day until 10am, 5 April 2022
If you have questions about these announcements, please email support@propertypartner.co.
Kind regards
The team at Property Partner
Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested.
The performance information (including any expression of opinion or forecast) reflects the most up-to-date data at the time of production; publication is made in good faith on the basis of publicly available information or on sources believed by Property Partner to be reliable.
Past performance and / or forecasts (if stated) are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. Exiting your investments (on the resale market, via the 5-year anniversary process or according to targeted strategies) is subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See Key Risks for further information.