Trading Division

Introduction

There is currently a flourishing and rising trend in the UK for buying residential property as an investment, both to generate an annual return and particularly for long term capital growth. ARLA (the Association of Residential Letting Agents) anticipates that the private rental sector will increase from its existing levels of around 11% of the housing market up to 20% by the year 2020.

Adderstone's diversification into supplying this growing market was a direct result of its success as a property developer. As the Group gained a national reputation for supplying quality investment product in the North East, a number of deals were done with property clubs and syndicates involving the bulk selling of apartments at discounted prices. With an in-house legal department, Adderstone was well equipped to cope with the relatively complex conveyances involved in such deals.

As Adderstone's client base grew however, the company were unable to generate sufficient product to cope with demand. The Adderstone Trading Division therefore formed partnerships with a number of developers including Pyeroy, Persimmon and Boweys as well as a number of other local developers and negotiated discount in return for commitment to a batch of apartments or houses.

The direct result has been that the Trading Division now has plenty more product on its books and is able to sell this on to its growing investor client base at reduced prices. Moreover the company's in-house legal department can often work closely with investors' solicitors to deliver portfolios with very little cash input, opening up the property investment market to the smaller investor.

Adderstone also frequently offers genuine rental guarantees to purchasers and can also assist with furnishing properties it has sold. Service elements such as these provide a true 'soft introduction' to investing in the residential property market and give Adderstone a real advantage over, for example, property clubs, which tend to have a much more limited infrastructure.


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