6th August 2006
Sunday Business Post Online – Let scheme to attract investors
By Michelle Devane
British-based property company Imagine Homes is aiming to attract Irish buyers into British urban projects by offering a guaranteed 5.5 per cent rental return per annum for four years.
The company is targeting buyers through a letting scheme known as buy already let; investors purchase properties off the plans, and Imagine Homes fully manages and lets their unit.
The firm, which was set up four years ago, opened in Dublin last month as part of a global expansion programme. It opened its first international office in Dubai last year and has seen a sharp upturn in international business.
According to Imagine Homes, there is a growing trend of overseas investors purchasing British properties due to the stability and performance of the market.
The company is set to invest over stg£250 million in Britain over the next two years.
Under the buy already let scheme, investors choose a property from a selection of off plan investment properties across Britain inclusive of fixture, fittings and all white goods.
The company sells it to the investor with one provision, that the buyer rents the property back to Imagine Homes for the first four years. It guarantees the investors a rental income equivalent to 5.5 per cent of the purchase price in advance per annum on completion of the property.
The buyer is the legal owner of the property and Imagine Homes rents it via a legally binding licence agreement.
Buyers are charged a letting and management fee of 10 per cent of the guaranteed rental income per annum.
Investors buying a property must pay a non-refundable deposit of stg£2,000 (€2,900) to reserve the property. A further stg£8,000 (€11,700) is paid on exchange of contracts and six months later a further payment of 10 per cent of the remaining balance is required.
Twelve months from the date of exchange, if completion has not taken place, a further 5 per cent deposit is required with the balance is paid on completion.
The firm requires investors to buy a fully-installed furniture package to ensure the apartments are let quickly; the packages cost between €10,200 and €14,600 depending on the number of bedrooms.
When the property is completed, Imagine Homes fully manages the residence, finding the tenant, taking references, issuing contracts and collecting rents. At the end of Imagine’s rental period, the investor has four options – inherit the tenant, find their own tenant, sell the property or move in themselves.
According to Marc Lafferty, sales and marketing director of Imagine Homes, their acquisition team sources investment property across Britain which are chosen for their capital growth potential and above average rental returns. There is a large portfolio of off-plan properties investors can choose from.
Lafferty said the company has increased its presence overseas over the past year on the back of the scheme’s success in Britain.
“It is clear that taking away the traditional aggravation from property investment has proved a popular with overseas investors as it has in the British market, and we now have plans in progress to expand our international operations further,” Lafferty said.
He said the scheme has been well received and proved extremely popular to a wide spectrum of individuals. “We have sold to all types of buyers, not just the traditional buy-to-let investors who would have a number of properties – we have also sold to young people who may not even own a residential property,” he said.
Among the developments investors can choose from is Waters Edge, a riverside development of apartments in Shipley, West Yorkshire ten miles from Leeds and on the edge of the world heritage site of Saltaire.
There are 33 apartments remaining available in the scheme, which is scheduled for completion in mid-2007.
Prices start at stg£130,000 (€190,000) for a one-bedroom apartment measuring between 35 and 43 square metres, while the two-bedroom apartments range between 47 and 53 square metres.
In London, City Tower is a 16-storey development of apartments in Canary Wharf which should be ready for occupation in March of next year.
Prices start at stg£430,000 (€630,000) for a one-bedroom apartment measuring between 41 and 67 square metres.
The two-bedroom units extend to 96 square metres, while the three-bedroom units measure 119 square metres.
The development has good transport links with Crossharbour Docklands Light Rail and Jubilee Line linking with mainframe London transport networks.
For further information contact Imagine Homes on 00441252-533204 or e-mail info@imaginehomes.co.uk.