Real Estate Investor Magazine South Africa Real Estate Investor Magazine - August 2017 | Page 47

the UK. While in the south of the UK, higher demand has
pushed up prices, resulting in high capital requirements to
enter the market and weaker rental yields.
Most investments that we target have rental yields
ranging from 8% to 12% per annum for buy to lets
investments (single tenant houses, usually for families)
or 15% to 20% per annum for houses of multiple
occupation investments (shared tenant housing, usually
for young professional, students or blue collar workers).
The mortgage lending interest rates that we put in
place on our investment properties varies between 3%
to 6% per annum. This interest rate is subject to credit
history of your limited company, asset base within your
limited company and status relating to the directors
and shareholders of the limited company.
This is great news for a real estate investor who is
looking to generate cash flow in both the short term
and the long term.
Mortgage Lending
The UK mortgage market is one of the most innovative
and competitive in the world. This has led to a wide
range of mortgage lenders and types of mortgages.
There are primarily two type of mortgage lending
products available in the market.
Firstly, residential mortgages for home buyers or first
time buyers. This lending market is driven on providing
mortgages based on income and affordability criteria.
Secondly, and most importantly, investment
mortgages for investors. This lending market is driven
on providing mortgages based on asset security and
rental income criteria.
This is very good news for a real estate investor
who is looking to expand their property portfolio and
wants to invest in an asset based lending investment
market and does not want to be constrained by their
personal affordability.
Currency Weakness
The Pound Sterling commonly known as the Pound, is
the official currency of the UK. The Pound is the fourth
most-traded currency in the foreign exchange market.
The Pound fell dramatically after the Brexit vote last
year. Many foreign investors have been acquiring real
estate assets within the UK at 10% to 15% lower entry
costs.
This is exceptionally good news for a real estate
investor who is looking to diversify their capital base
into a global currency, such as the Pound.
Be fearful when others
are greedy and
greedy when others are
fearful
WARREN BUFFETT
Warren Brusse is the CFO of United Kingdom
Property Partners
www.reimag.co.za
AUGUST 2017 SA Real Estate Investor
45