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Capital returns
% growth predicted pa
Owner Partner
Investor partner
Return on investment pa average
2 years March 06
6%
9,267
9,267
63%
Achieved
8.98%
13,865
13,865
137%
5 years March 09
6%
25,358
25,358
68%
Achieved
8.3%
35,025
35,025
81%
10 years March 14
6%
59,294
59,294
79%
Total
Owner Partner
50%
Investor Partner
50%
Return on investment
Value Feb 05
184,950
92,475
92,475
Cost March 04
149,950
74,975
74,975
Capital growth
35,000
17,500
17,500
202%
Investment March 04
17,270
8,635
8,635
Profit over 1 year
202%
202%
► Important note
Please remember that the property market is geographically sensitive and prices are volatile.
Therefore your particular investment could go down rather than rise.
Your investment is at risk if you do not keep up the mortgage and rent payments.
This case study is for illustrative purposes only and does not constitute an offer or form part a contract.
Your actual deposit will depend on your circumstances.
► Capital growth to September 2005
Total
Owner Partner
50%
Investor Partner
50%
Return on investment
Value Sept 05
194,950
97,475
97,475
Cost March 04
149,950
74,975
74,975
Capital growth
45,000
22,500
22,500
260%
Investment March 04
17,270
8,635
8,635
Profit pa over 1.5 years
173%
173%
Total
Owner Partner
50%
Investor Partner
50%
Return on investment
Value
197,500
98,750
98,750
Cost March 04
149,950
74,975
74,975
Capital growth
47,550
23,775
23,775
275%
Investment March 04
17,270
8,635
8,635
Profit pa over 2.25 years
122%
122%
July 2006 Mr N has now decided to sell as his personal circumstances have changed. His Investor Partner has decided not to buy him out and they have decided to sell up completely.
The Estate Agents have a guide price between £195,000 and £205,000 and its now on the market for £197,500. We will update this appraisal as soon as the sale price is agreed.
The Joint Equity Scheme is for first-time buyers, home owners and property investors. This site is developed and maintained by Joint Equity ltd. ©Joint Equity (2008)
Joint Equity Ltd works with Mortgage Beaters Ltd to provide case studies & Illustrations to prospective Owner-Partners & Investor-Partners. Joint Equity Ltd does not carry out any regulated activities and so is not regulated by the FSA (Financial Services Authority). Joint Equity Ltd are introducer appointed representatives of Mortgage Beaters Ltd, which are authorised and regulated by the Financial Services Authority.
The content of this website is accurate to the best of our knowledge and for information only. Joint Equity does not provide financial advice.
Total
Owner Partner
50%
Investor Partner
50%
Return on investment
Value
225,000
112,500
112,500
Cost March 04
149,950
74,975
74,975
Capital growth
75,050
37,525
37,525
434%
Investment March 04
17,270
8,635
8,635
Profit pa over 3 years
144%
144%
Mr N decided not to sell and his Investor Partner stayed with the investment..
Total
Owner Partner
50%
Investor Partner
50%
Return on investment
Value
230,000
115,000
115,000
Cost March 04
149,950
74,975
74,975
Capital growth
80,050
40,250
40,250
463%
Investment March 04
17,270
8,635
8,635
Profit pa over 4 years
116% pa
116% pa
Total
Owner Partner
50%
Investor Partner
50%
Return on investment
Value
£220 000
£110 000
£110 000
Cost March 04
£149 950
£74 975
£74 975
Capital growth
£70 050
£35 025
£35 025
405%
Investment March 04
£17 270
£8 635
£8 635
Profit pa over 5 years
81%
81%
Costs
Owner £’s
Investor £’s
Property value
74,975
74,975
Deposit @ 10%
7,498
7,498
Mortgage amount
67,478
67,478
Mortgage repayment
(interest only)
295
295
Rent
375
nil
Joint Equity fee 10% of Investment Return
nil
37
Total monthly costs
£670
£332
Purchase fees
Legal fees
250
250
LA search
63
63
Stamp duty
750
750
Land registry etc
75
75
Joint Equity introduction fee
nil
1,500
Total purchase fees
£1,137
£2,637
► Projections at purchase March 2004
Revenue returns
Monthly
Annually
Return on investment
Owner saving on rent
80.00
960.00
13%
Investor gross income
375.00
4,500.00
Less J E mgt fee - 10%
-37.50
-450.00
Investor mortgage
-295.00
-3,540.00
Net investor income
42.50
510.00
6.8%
Date of purchase
30 March 2004
Owner-Partner
Mr N
Purchase price
£149,950
Date of birth
17/06/80
Type of property
2 bed I bath house
Salary
£18,200
Rent pcm
£750
Address
Takeley, Herts
Owner share
50%
Post code
Xxx xxx
Investor share
50%
Investors
click here for more information
Important Note:
This case study is intended to demonstrate how an investment in a property could grow by reference to an actual example that we track over the years since it was bought in 2004.
It does not reflect the changes in monthly costs when the mortgage interest rate charged by the lender changed over the years.
The interest rates for this case study in March 2004 were:
- Bank base rate 4.0%
- Mortgage rate interest only 5.25%
- The deposit required in 2004 was 10% which may not be available at the time of your application
For the current costs of a Joint Equity purchase please complete an Online Illustration which is free, without obligation and only takes a few minutes Click here
This page is intended to give prospective owners and investors an idea of what they could expect from Joint Equity ownership.
Mr N is a 23 year old working in the IT industry, earning just over £17K a year. He had been renting a flat for 2 years locally, and wanted to buy his own home to benefit from the high levels of property growth around Stansted airport.
He wanted to buy a 2 bedroom house with a garden at £149,950, but his salary would only permit a mortgage of £68,400. He had savings available of £10,000, which would leave him short of £71,550 and unable to buy his chosen home.
An actual purchase in March 2004
Not the actual property in the case study
Through the Joint Equity Scheme this shortfall is provided for by the Investor-Partner, with the effect that Mr N gets his chosen home!
The illustration below shows how Mr N and his Investor-Partner bought his home, and the costs, earnings and savings achieved by both.
See typical costs for full details of who pays what.
The purchase was made in March 2004 and the case study tracks the actual return on investment achieved against our projected return on investment in 2004.
Our Illustration projections use the average annual capital growth from 1962 and measured by the Council of Mortagge Lenders as 6.2%.
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