Lincolnshire’s historic county town boasts one of England’s finest cathedrals, and one of Britain’s best-preserved Norman castles, built by William The Conqueror, which sits proudly on the hill above the River Witham. Across the marina from the old city, The University of Lincoln has expanded rapidly in recent years and is now a major source of economic growth and jobs for the area.

The leafy residential area of St Catherine’s lies just to the south of the historic centre and is named after the church of St Katherine’s, a listed landmark that dominates the neighbourhood.

St Catherines Mews was acquired at a 17% discount to its RICS break-up value and is 50% geared for enhanced returns. With an attractive dividend yield and strong growth predictions for the area, the investment case is convincing. The case is underpinned by four main factors:

• The investment comprises all 21 flats in this property and is geared at 50% loan-to-value (LTV) of the purchase price. Gearing gives enhanced exposure to property price movements, and the potential for amplified returns; though investors must note amplified negative returns if prices fall.
• There is a significant discount reflected in the purchase price of this property relative to buying the units individually – we’re purchasing the entire block at an RICS investment value of £1,865,000 versus the RICS break-up value of the individual flats of £2,255,000.
• By purchasing the unbroken block at its investment value as opposed to its break-up value, investors will benefit from a higher net dividend yield than they would achieve by purchasing individual flats. Net income is further enhanced by a favourable mortgage rate relative to the net dividend yield.
• The property is located in the Cathedral City of Lincoln, in the East Midlands. The well-regarded research team at Savills estimate this region to enjoy a forecast capital growth of 16.5% over the next 5 years (2016: 5%, 2017: 3%, 2018: 3%, 2019: 2.5%, 2020: 2.5%).

These points are discussed further below, or you can go directly to our properties page by clicking below:

Our investment comprises an unbroken block of 21 two-bedroom flats, as well as the Freehold interest for the building. We were able to secure this property prior to auction by offering the vendor speed and certainty. We are paying £1,865,000 for the entire block versus an RICS certified break-up value of the individual flats of £2,255,000. In the interests of prudence, and as per our valuation policy for blocks of over 10 units, we will value this property at RICS investment value on our platform.

By purchasing the entire block at its investment value as opposed to its break-up value, investors will benefit from a higher dividend yield than they would achieve by purchasing individual flats.

This property offers an attractive dividend yield. This is partly due to the discount secured at the purchase price, and partly because rental yields tend to be higher in areas outside London and other major cities. This figure is net of mortgage interest payments, purchase costs, furnishings, remedial cosmetic works, forecast maintenance, annual voids, corporate taxation and all fees. Net income is further enhanced by a favourable mortgage rate relative to the net dividend yield.

Lincoln is a historic cathedral city dating back to 1st century BC. The property is located on the west side of St Catherine’s, near to its junction with Colegrave Street. Local shops and amenities are located approximately 0.1 miles to the north of the property. Lincoln city centre is located approximately 1.7 miles to the north and provides a more extensive range of shops and other facilities including Lincoln Central Rail Station. Local schools and colleges are within a two-mile radius of the property, including the University of Lincoln which lies approximately 0.9 miles north.

The well-regarded research team at Savills estimate this region to enjoy a forecast capital growth of 16.5% over the next 5 years (2016: 5%, 2017: 3%, 2018: 3%, 2019: 2.5%, 2020: 2.5%).