INVESTtoRENT 5% p.a. Bond
Income. The income is protected by rental guarantee insurance for the term of the investment. The Company will set aside within its own bank account £1,000 per house with an intention to provide protection against rental voids. We will purchase in areas, that we believe, the house is more likely to increase in value over 5 years.
Tenants. Tenants are selected by major Lettings companies and are further vetted by the Rental Guarantee Insurer
Properties. Properties are carefully selected using major letting agents, Hometrack and RICS. We purchase volume at a discount which offer equity day 1. All pricing is transparent and confirmed by RICS. The properties, heating, pipes, electrics are fully maintained using recognised maintenance contracts.
Finance. We have a reserve fund for rental voids. The objective is to ensure that the ratio of income to expense remains fixed throughout the duration of the proposition.
House price inflation. Notwithstanding the ONS confirmation that the average annual rate of house inflation is 6.9% over the past 30+ years, we have adopted a target of only 3.5%. Shortage of housing in the UK continues to bolster values. According to the latest ONS Overview of the UK population, July 2017, the population is projected to rise from "65.6 million, its largest ever... and reach 74 million by 2039". This increase equates to an annual projected growth of over 1,000 per day based on births less deaths. If this remains the case, during the term of this investment, the population is projected to grow by over 1.9m. The House of Lords Select Committee for Economic Affairs, 2016, concluded that the UK requires a "build program of 300,000 houses a year for the foreseeable future".
Market Crash. Should the maturity of the bond coincided with a severe market collapse, where assets lose more than their expected market value in excess of the estimated 20%-25% buffer already adopted for such events. The consequence could result in the capital value being returned less than initially invested. To avoid such a scenario the board would with the consent and agreement of bond holders and where a majority vote would prevail, delay compulsory liquidation of assets until market recovery.
We are facing an acute housing crisis with home ownership-and increasingly renting-being simply unaffordable for a great many people. "The only way to address this is to increase supply. The country needs to build 300,000 homes a year for the foreseeable future.
Lord Hollick, Chairman of the House of Lords, Economic Affairs Committee