Do your due diligence when property portfolio building

When purchasing a property of any sort and property portfolio building it is highly recommended you do your due diligence as it is such a major purchase.

In particular when purchasing Leasehold Properties additional focus needs to be given to those elements which are outside of your control such as Service Charges / Management Charges, Ground Rent and potential requirements for Lease Extensions. Understand what these costs are and the responsibilities of each party.

Last year within our Mortgage Business we were aware of a client who was looking to purchase a Flat in London via one of the major Buy to Let Lenders, the property was being sold below the market value for a quick sale so on initially inspection seemed highly attractive. However further digging around identified the remaining years on the Lease were extremely close the borderline over which this lender was not prepared to lend (70 year remaining).  (Lenders have a bottom stop they will not go below as they know that at the end of the lease term the property ownership reverts back to the Leaseholder, so the ability to sell the property on in the future is non-existent and therefore the value of their investment is reduced).

When the buyer investigated extending the lease to ensure the property retained its mortgage ability and therefore value the Leaseholder asked an astronomic amount of money, which almost matched the value of the purchase.  This instantly turned what was a ‘great deal’ into an extremely ‘disastrous deal’.  Thankfully in this case the upfront due diligence identified this and the investor was saved.

The principles are the same for all leasehold buildings, as the cost of maintaining the Leasehold property and the shared communal areas can be expensive and need to come out of your money.  You also have to consider the quality of the service provided, as a rundown uncared for property will not only affect the quality of the person living there, but also massively impact the value of your property, your ability to rent it and your ability to sell it.

For advice on investing in property and effective property portfolio building, it’s important to do the correct due diligence and know what to look for when determining if it’s a good deal. Contact me, Gill Alton, for impartial advice. I also believe that property as a pension is the key to a comfortable retirement and balanced pension plan and can help you add property as an asset to your pension pot.


Gill Alton

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Gill Alton is the founder of Alton Property Partners, which provides a comprehensive and personal Property Portfolio Building Service for investors in the UK.

Alton Property Partners manage the entire investment process, from sourcing property at a discounted value, co-ordinating the Mortgage, arranging the refurbishment, right through to ensuring it is ready for the rental market.

The service is specifically aimed to support those who recognise the value of a UK investment portfolio, but lack the time, or knowledge to be able to invest for themselves because they are full time employees or Business Owners. With full consultation and comprehensive financial analysis, clients can be assured that their portfolio of strong yielding properties will be built to exacting standards and they will be kept up to date every step of the way.

Having been involved in property for 16 years Gill has built a personal portfolio for her family, and in addition to Alton Property Partners, runs a Property Mentoring Business, Venus Property Mentoring which focuses on supporting new investors onto the investing ladder. Having originally left the Corporate world to be a Qualified Mortgage Broker, Gill’s husband now focuses on their family Mortgage Brokerage in Maidenhead – Alton Mortgages.

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Alton Property Partners
6 Bramble Drive, Maidenhead BerkshireUKSL6 3NX United Kindom •0845-095-5060

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