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Accommodation
The property has been measured by BKR Floor Plans and provides the following accommodation:
| Gross Internal Area – Floor by Floor | ||
| Ground Floor Entrance | 2.04 sq m | 22 sq ft |
| First Floor | 264.39 sq m | 2,846 sq ft |
| Second Floor | 264.39 sq m | 2,846 sq ft |
| Total | 530.83 sq m | 5,714 sq ft |
| Gross Internal Area – Flats | ||
| First Floor | ||
| Room 101 | 22.30 sq m | 240 sq ft |
| Room 102 | 23.69 sq m | 255 sq ft |
| Room 103 | 23.69 sq m | 255 sq ft |
| Room 104 | 25.64 sq m | 276 sq ft |
| Room 105 | 20.90 sq m | 225 sq ft |
| Room 106 | 22.85 sq m | 246 sq ft |
| Room 107 | 24.80 sq m | 267 sq ft |
| Room 108 | 34.53 sq m | 264 sq ft |
| Communal Kitchen/Dining Room | 34.47 sq m | 371 sq ft |
| Second Floor | ||
| Room 201 | 22.30 sq m | 240 sq ft |
| Room 202 | 23.69 sq m | 255 sq ft |
| Room 203 | 23.69 sq m | 255 sq ft |
| Room 204 | 25.64 sq m | 276 sq ft |
| Room 205 | 20.90 sq m | 225 sq ft |
| Room 206 | 22.85 sq m | 246 sq ft |
| Room 207 | 24.80 sq m | 267 sq ft |
| Room 208 | 24.53 sq m | 264 sq ft |
| Communal Kitchen/Dining Room | 34.47 sq m | 371 sq ft |
A set of floor plans is available to download, and the measured survey report will be re-addressed to a purchaser at a cost of £720.00 plus VAT.
EPC
The property has an EPC rating of D.
Council Tax
We understand that each HMO room is assessed individually and all being Council Tax Band A. The tenants are responsible for paying their own Council Tax.
Tenure
Long Leasehold for a term of 999 years from 21st August 2018 (approximately 992 years unexpired) at a peppercorn rent.
Tenancies
We understand that the property is currently let in accordance with the Tenancy Schedule which is available to download, producing an approximate total monthly income of £5,378.00 (£64,536 per annum). This currently comprises two elements:
- AST Income: Seven units are let on Assured Shorthold Tenancies (AST’s) with five of these tenants on rolling contracts. In addition to the monthly rent each residential tenant pays a fixed contribution to the utilities. We understand the total income per month is £3,145.00 (£37,740 per annum).
- “Property Host”: The remaining nine units are dealt with by an agreement between the landlord and “My Property Host”. My Property Host is a property management company offering short term lets on “AirBnB” and other short term rental sites. We understand that the average income generated for the landlord is approximately £2,233.00 per month / £26,796 per annum (after all fees).
The agreement with My Property Host was entered into on 12th December 2022 and can be terminated after 12 months, subject to three months’ notice. Notice to terminate was served by the vendor on 15th April 2025 and accepted by My Property Host, hence the agreement will terminate on 15th July 2025.
Therefore, from July 2025, an investor will be able to let each unit on an AST at market rents. Based on a rent of £350.00 per room per month, plus a utility contribution of £100.00 per room per month, the total estimated rental value will be £7,200 per month / £86,400 per annum (gross).
As of 3rd April 2025 there were arrears totalling £2,215.14. A copy of the arrears schedule is provided in the data room.
We have provided in the data room a schedule of operating expenditure from the borrower. As a result the information has not been verified but we supply for information purposes. Note that the schedule includes assumed repair costs, management and other items which a buyer may consider have inflated the running costs.
VAT
The property has not been registered for VAT. Therefore, VAT will not be payable by a purchaser.
Market Evidence
A purchase at the asking price reflects a capital value of £100 per sq ft.
A 5-bedroom mid-terrace house being occupied as an HMO totalling 1,184 sq ft, located on Queensgate Street approximately half a mile from the subject property, is currently on the market seeking offers in excess of £200,000 / £169 per sq ft. See here.
A 4-bedroom HMO on Marshall Street, HA5, located approximately 2 miles north of the subject property is currently under offer at a figure equating to £125 per sq ft.
Proposal
We are instructed to seek offers in the region of £575,000, subject to contract, reflecting a net initial yield of 15.0%, assuming purchaser’s costs of 4.96%. The capital value at the asking price is £100 per sq ft.
Please note that a purchaser will be re-charged the costs of the measured survey (£720.00 + VAT) and the searches (£xxx) which are provided in the data room.
Investment Considerations
An opportunity to acquire an HMO investment opportunity;
The property was converted to an HMO in 2019/2020, providing modern accommodation;
Comprises 16 en-suite studio rooms;
Fully licenced;
The property is fully let;
VAT free investment;
A purchase at the asking price reflects an attractive yield;
Attractive lot size for an investor.
Disclaimer
Fixed Charge Receivers Andrew Pear and Milan Vuceljic by the powers given by the Mortgage and all other powers given by statute or otherwise who act as agents for the Company and without personal liability. Both Fixed Charge Receivers are licenced by the Insolvency Practitioners Association and are bound by the Insolvency Code of Ethics.
