ITP Properties Business Plan

ITP ITP PROPERTIES

BUSINESS PLAN Strictly Private & Confidential

Mr Daniel Scott Pinkney 53 Gunnergate Lane Marton-in-Cleveland Middlesbrough Cleveland TS8 9AZ

Telephone: 01642 519268 Mobile: 0797 161 2964 Email: dan.pinkney@itp-properties.eu.com

EXECUTIVE SUMMARY Aims & Ambitions of ITP Properties To build a property portfolio generating a passive income of £10,000 by the end of the first year rising to £30,000 per annum at the end of the third year, whilst building equity of £200,000 by the end of year one rising to £750,000 by the end of year three.

How we aim to do do this By building a portfolio of medium/high-yielding properties to create passive income, but using 'forced appreciation' to grow the equity whenever possible to increase spending power to buy more properties.

'Forced appreciation' can be achieved through the following means: Developing residential property in need of repair and modernisation Developing residential property that has further expansion prospects (i.e extensions or land to build/sell/develop) Residential conversions (i.e flats and apartments).

We intend to adopt two processes to build the portfolio – ‘Buy-Develop-Let’ and ‘Buy-Develop-Sell’.

Buy-Develop-Let (Primary Route) This involves placing the newly renovated properties on the lettings market, with the increased equity (through 'forced appreciation'), being released to form the deposit for subsequent renovation projects.

This process can be repeated ad-infinitum to build the portfolio and consequently, the passive income generated.

Buy-Develop-Sell (Secondary Route) This effectively acts as our exit strategy. If for any reason, the lower yielding properties do not meet our cashflow targets and look to be approaching cash-negative status (i.e we have to supplement the rent to pay the associated costs of the property), then we would look to sell the property releasing all the equity to put into better performing prospects.

One other benefit to 'Buy-Develop-Sell' is that it can be utilised for prime location properties in need of renovation. In this scenario the rental yields are unlikely to produce positive cashflow but the prospect of more favourable profits upon selling the property mean it can provide additional working capital to build the rental portfolio further.

Why property development?

Developing/renovating property is a good business and investment vehicle due to: Capital growth in short term (due to 'forced appreciation') Capital growth in long term (due to rising house prices) Income (through letting) Gearing*

*Gearing the investment: Essentially using borrowed money to finance a proportion of the investment (for a fee) but keep the capital gains as profit. Property is the only investment vehicle that allows this on a large scale due to borrowing on property (i.e mortgages)

The market opportunity Property prices in the North East are currently the second lowest in the UK (Scotland being the first) and as such, rental yields are still reasonably high (averaging 6-11%)*. The North East also has strongest employment growth in the UK and with continued inward investment and regeneration helping capital appreciation, the North East is fast becoming a property hotspot providing superb investment potential. *A combination of which, provides an average ROI of 34.7%, second only to London at 36.3%. (http://www.themovechannel.com/News/2006/July/7a.asp)

Finance requirements Approx £50,000 of personal investment is to be introduced for securing property and carrying out renovation in the first year. Initial borrowings of circa £200,000 are anticipated in the form of renovation/ development mortgages and overdraft facilities which will enable us to purchase and renovate 3–6 properties at the outset. These properties will be placed on the lettings market (where positive cashflow exists) and equity from the properties released through re-financing to form the deposits for subsequent development projects.

TABLE OF CONTENTS Executive Summary

P.2

Table of Contents

P.4

Business Introduction

P.5

The Process

P.6

Renovation Guidelines

P.9

The Team

P.14

The Market

P.15

Prospects

P.17

Competitive Business Strategy

P.18

Financial Section Typical £50,000 Investment Property Typical £60,000 Investment Property Typical £70,000 Investment Property Cashflow Forecast

P.19 P.21 P.22 P.23 P.24

Appendices Schedule of Works (External) Renovation Checklist Schedule of Works (Internal) Renovation Checklist Sample Building Contract (Minor Works)

P.26 P.34 P.35 P.37

BUSINESS INTRODUCTION With UK property proven as a profitable long-term investment and business vehicle1, ITP Properties will be working towards securing UK properties in need of repair, modernisation, development or conversion.

By securing these properties at below market value and renovating them to the standards required for letting, we are locking in short-term capital growth (through 'forced appreciation'), gaining cash positive income (through letting) and yet still retain the capacity for long term capital growth. Increased equity through renovation also provides us with continuing capital to reinvest and accelerate the growth of the portfolio.

THE PROCESS STAGE 1 - The Team in Place Involves making contact all the people that could be involved in the project including Accountant/Tax Advisor, Solicitor/Conveyancer, Mortgage Advisor/IFA, Project Manager, Quantity Surveyor, Structural Engineer, Planning Consultant, Architect, Builder, etc. For further details see ‘The Team’ section on Page 11.

Note: Smaller businesses and individual tradesmen may not be registered for VAT, so on a private investment (unregistered for VAT) this would increase profit margins as there is no 17.5% VAT to pay.

STAGE 2 - Locating Properties Sourcing properties for renovation, refurbishment and development. These would be under the current stamp duty threshold of £125,000 and be Freehold properties only (Leasehold properties offer far less financial and development control due to service charges, management committees and subsequent domestic disputes). This can be done through several avenues including: a) Property Auctions - we currently subscribe to Property Auction News, a monthly periodical that keeps us updated with all the property auctions held throughout the UK. b) Local estate agents - keeping in touch with the local estate agents and making sure we are notified of any new development or investment opportunities. c) Online web resources to keep us abreast of the the market. These include rightmove.co.uk, vebra.com, fish4homes.co.uk, propertysecrets.net and sqftmag.com (North East) d) Repossession properties from local councils and papers. e) www.pickupaproperty.com. We currently subscribe to this service and receive daily emails of properties in need of renovation in the North East and Yorks / Humber areas.

STAGE 3 - Shortlisting Properties Using the resources listed in Stage 2 we can begin our search for properties that appear to have good development or investment potential. Our criteria for a good (profitable) project are as follows: a) Property in an up-and-coming area (Hotspots). For example the area is undergoing re-development, new companies are attracted to the area, and/or new transport links are being constructed. This ensures that property prices remain bouyant and have capacity for good capital growth whilst also ensuring rental demand is high. Middlesbrough counts as such an area with good transport links (including Teesside Airport) and re-generation in the form of the Middlehaven project which is underway as we speak. This 250 acre development has a public and private sector investment of £500m, up to 3,000 new jobs created, 2,400 homes (built over 20 years), 800 square feet of commercial office development, and significant leisure proposals such as hotels, bars and restaurants. This type of development will only help push up local property values and rental incomes in the medium/long term. b) Property that costs considerably less than comparable properties in the immediate area. This could be due to one of several factors including: in need of modernisation, in a bad state of repair, structural issues or damp, repossession order, or vendors requiring a quick sale (i.e distressed/motivated sellers).

By searching for properties that meet these criteria we have the foundations for sourcing numerous potential development and investment opportunities, this also provides us with a wide range of properties from two bedroomed terrace houses through to full scale conversion projects.

From these shortlisted properties, we need to obtain as much information as is possible. This can be done by contacting the auction houses or estate agents in the immediate vicinity to the property(ies) in question. We can also conduct online research to find out what similar properties in the area are fetching and what the rental values/demand are (to help reinforce any information disclosed by the estate agents).

From that we can forecast basic profit margins and rental yields (should be over 8% to be profitable, and ideally over 10%).

Gross Yield =

Annual Rental Value x 100 Property Value

STAGE 4 - Visiting Properties / Pre-Assessment From the research gained in Stage 3 we should hopefully have a few properties that seemingly have good investment and development potential - this is essentially an ongoing task and we hope to be visiting in the region of several properties a week to investigate further. We will visit these properties with a structural engineer who will be able to give us an initial assessment of the property and it’s faults (if any) and help provide a ballpark figure for renovation costs. This visitation also allows us to assess the local area and talk to other local estate agents that may be able to provide feedback on this property and the immediate area, as well as predicted value on completion and rental incomes. After visiting all our shortlisted properties in this manner we should have an idea which ones we would like to move on. If any of these are auction properties we would have our solicitor look over any supporting documents to see if there are any conditions or hidden issues with the property before deciding whether to bid for it. A quantity surveyor will also be instructed to get a detailed specification for necessary works (including a detailed estimate on what each job should cost, and guidance on how much money should be released to the builders at each stage of the works). This also has the benefit of calculating acheivable profit margins before bidding on the property. See the 'Renovation Guidelines' section on page 9 for more detailed information on the assessment of properties.

STAGE 5 - Specifying Budget for Purchase Specifying a budget for the property(ies) we are looking to buy at auction involves calculating all associated costs* and after completion still give us a return on investment of at least 20%. This budget is then strictly adhered to at auction. As for properties that reside with estate agents we adopt the same approach as above so we have an idea for the maximum we are willing to pay and then put in an offer well below this to begin with. Chances are if the property is in need of repair, under a repossession order, or has been on the market for some time then any offer will be considered. If not we raise our asking price up until it is accepted (as long as it remains within our preset budget). Also conditions can be imposed on buying the property if it harbours expansion possibilities - i.e subject to planning permission or that work can begin on the property after exchange of contracts but before completion. *Renovation/Development (+10% continuation funds), Mortgage, Letting agents fees, Solicitors/Conveyancing fees, Void Periods, Building Insurance & repairs, Stamp Duty.

STAGE 6 - Buying the Property Once an offer is accepted at auction, then usually a deposit of 10% is payable and we would then have 28 days to complete (and pay the remaining 90%). With property purchased through an estate agent this can take longer (over 6 weeks). This is a crucial period and valuable window of opportunity that must not be wasted as it is a time to arrange and book in builders, plumbers, electricians etc in anticipation of completion. This means they can start immediately, and in some cases, prior to completion, thus saving us mortgage and other finance costs.

STAGE 7 - Renovation and Development This is the key stage that determines the profitability of the project. If the renovation goes to schedule and meets all the preset budgets then profit margins will be healthy.

Any additional renovation or building work (apart from any necessary repairs) should be those that not only add value to the property but give a return on the cost of the renovation. for example, If a garage were to cost ÂŁ5000 to build, it should add over ÂŁ6000 to the final value of the property (a 120% return on investment). For more in depth details on renovation see the next section entitled 'Renovation Guidelines' on page 9.

STAGE 8 - Assessment of Completed Development On completion of all the renovation work, the property would be valued by an estate agent (for letting and selling) and also the bank/mortgage lender (to arrange remortgage and calculate equity). From this feedback we then chose whether to enter it into the rental market (if it generates positive cashflow and has additional equity that can be released to form the deposit for the next project) or sell to realise working capital to invest in another development property. The long term aim is to build up a portfolio of rental properties that have good capacity for medium/long term capital growth whilst continuing to generate cash-positive income.

STAGE 9 - Completion of Development Put the property on the market to let or sell and upon completion any realised profit or equity can be brought into the next development. This should enable us to build up a profitable property portfolio fairly quickly.

RENOVATION GUIDELINES The renovation stage is the single most important aspect of the project, as even the purchase of a property is done with this in mind. If the renovation is done well, to budget and on time then the project will meet the profit margins previously stipulated. However failing to meet budgets, extended timescales and producing sub-standard work will mean profits will not only reduce but in extreme cases the project could operate at a loss.

The 3 key points of Successful Renovation 1. Assessment - Assessing a property for purchase.

2. Costing - Judging the opportunity and costs for the project.

3. Project Management (Planning & Timing) - Choosing the right approaches and managing the skills of others to best effect.

1. Assessment This stage of renovation involves investigating a possible renovation project prior to purchase. In doing so we need to find out the ‘Final Predicted Value’ which is the current ceiling price for similar properties in the immediate area. This gives us a benchmark to offset the costings which allows us to calculate the achievable profit margin in the renovation project, i.e Ceiling Price - Renovation Costs - Purchase Costs = Profit Margin.

In viewing a property the neighbours can be insightful in more reasons than one. Firstly you can see what the prospective neighbours are like but most importantly they will fit into a specific buyer profile / market segment. Is it a single person, couple, family? All help in planning how to structure and renovate a property to fit the key demographic of the area. This assessment of the target market is explained in further detail in ‘The Market’ section on page 15.

When renovating a property care must be taken to ensure that any job adds value (on top of what the job costs). This ensures that profit is made at each stage of the job, and therefore adds to the total profit made on the project. However, all repairs necessary to make a building structurally sound and liveable must be undertaken first before embarking on any ‘supplementary’ renovations.

The four fundamentals for adding value: a) Adding ‘kerb appeal’ i.e. change perceptions about the property.

Neutral (warm) paint.

Neutral odours.

New floor covering.

New internal doors.

New lighting.

New kitchen.

New bathroom.

Clutter free.

Clean lines.

b) Adding functionality Extending outwards.

Extending into loft.

Adding a conservatory.

At the lower end of the market for example, the following functions would be considered essential: A bathroom.

A downstairs loo (Perhaps a bonus!)

Three bedrooms.

Move up the property ladder a few notches and you can add a lot more: En-suite bathrooms to at least one bedroom.

Utility room.

Walk in wardrobes.

Study.

Cloakroom.

c) Remove disincentives Roof crumbling.

Plaster coming away.

Floors sinking.

Major dry/wet rot issues.

Woodworm infestation.

Chimneys leaning.

Major cracks over windows and doors Drainage system not working.

Walls sinking.

Windows falling out. d) Change spatial quality Did you ever walk through the front door of a house, into a dismal closed in hallway that felt like a phone box without windows? The impact can be quite difficult to get over. Space is not necessarily a’real’ quality.

It is mostly a ‘felt’ quality. A big house can be made to feel very small. A small house can feel big. So, we make a list of ‘uses’ for the property based on out target demographic and assign an importance to each.

We then build a design around this analysis.

Here are a few examples: Working.

Cooking.

Entertaining.

Bathing.

Sleeping.

Dressing.

Studying.

Reading.

Making phone calls.

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The table below also helps to show certain kinds of renovation jobs and the type of returns that we can expect to see from them.

High Returns

Medium Returns

Low Returns (can even produce a loss)

Adding an additional bedroom in a sympathetic style (up to 11% on value of property)

Conservatory (Only recoup 75% of costs, but can increase saleability)

Swimming pool

A 2nd bathroom with white fixtures/ shower (up to 10% on value of property)

Double glazing (dependent upon property can increase or decrease property value (period properties).

Garden makeover / decking

Offstreet parking (up to 8% on value of property)

Flat-roofed ground floor extension

Porch

Single garage (up to 11% on value of property)

Loft conversions

Bad loft conversions

Double garage (up to 20% on value of property)

Cavity wall and loft insulation

Internal decor (when expensive and unique)

Part central heating (up to 6% on value of property)

Removal of period features

Full central heating (up to 14% on value of property) Basic garden landscaping (difficult to quantify but can help sell house much quicker through perceived value.

Updating kitchen/bathroom Redecorating throughout (neutral scheme only) Replacing / cleaning carpets

2. Costing From the initial assessment stage we should have an idea of the ideal property to appeal to the target demographic. i.e 3 bedrooms, 2 bathrooms, garage or off-street parking etc. This can be the basis used to estimate costings for the renovations and subsequently the achievable profit margin.

If the profit margin looks healthy from our own initial estimates then we will be looking to purchase the property. However, prior to putting an offer in, we will employ the services of a building surveyor to assess the property in full and to advise on renovations and costings. From this we can assess whether our ballpark costings where near the mark but most importantly we can use the surveyor’s findings to recalculate the likely profit margin and then we can decide whether to make an offer and for how much. The surveyor's report can also be utilised for sourcing quotes for much of the building work - a detailed surveyor’s report can prove invaluable in this sense as it leaves very little margin for error and misunderstanding and therefore the supplied quotes accurately reflect the work required.

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3. Project Management As soon as our offer has been accepted on the property then the Project Management is called into action. We know what is required, so it is just the matter of planning and organising the renovation works so that they flow quickly and efficiently from start to finish.

One invaluable tool that can be adopted for Project Management is a PERT Chart (Program Evaluation Review Technique). PERT is a technique for connecting tasks together in a logical sequence and reworking until a pattern of events is optimised.

Each activity on the chart contains a job description, duration and resource. These activity boxes are connected together to form a plan. An example of a PERT Chart is shown below

Complete bathroom

Tear out old fixtures and fittings

6

15 days

Wed 22/5

Tues 11/6

Create new wall opening

Put on market

Make sale

3

1 day

5

1 day

2

45 days

10

35 days

Mon 20/5

Mon 20/5

Tues 21/5

Tues 21/5

Wed 19/6

Tues 20/8

Wed 21/8

Tues 8/10

Complete kitchen

Get rid of final skip

Money in the bank

7

20 days

1

1 day

Wed 22/5

Tues 18/6

Wed 9/10

Wed 9/10

Install driveway, path and edging

Finish landscaping

4

1 days

8

1 day

9

1 day

Tues 21/5

Tues 21/5

Wed 22/5

Wed 22/5

Thu 23/5

Thu 23/5

One of the crucial aspects of planning using PERT is that it will generate a ‘Critical Path’. Because any optimised plan has many activities going on at once, all with their own timelines, there will always be a sequential path through the plan that takes more time than any other. The Critical Path takes priority as it determines the overall timeline of the project. As the project progresses this ‘Critical Path’ will change and as a result, so does the priority.

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General Renovation Guidelines: One Brand/Make of carpet (i.e UKCarpetsDirect.com - Corsa 650) One Brand and colour of Paint (i.e Dulux Cracked Clay 3) One Brand of fittings and fixtures (i.e www.bathrooms-kitchens-uk.co.uk/) One Brand of white goods (i.e John Lewis JLWM1202 Washing Machine) - for rental properties only The reason for this is several: 1) The decor is neutral and the same throughout so the property appears spacious, cohesive and appeals to all markets 2) Maintaining the properties is quicker - if a property needs a lick of paint we know exactly which colour/brand to use.

3) Maintaining the properties is easier - one brand/make of white goods - one contact for maintenance and repurchasing.

4) Cheaper - products can be used and swapped from/to several properties and as the portfolio grows then we can also negotiate costs down.

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THE TEAM Mr Daniel Pinkney - Sole Proprietor / Investor A former director of Ellahi & Pinkney Limited (a design/advertising agency based in Stainton Village, Middlesbrough), Daniel has a wealth of business experience and marketing/design skills that can be called on to realise the full potential of ITP Properties. Daniel is also the sole investor to ITP Properties contributing ÂŁ50k of initial investment.

Responsibilities/Involvement: As the Sole Proprietor Daniel will be involved in all aspects of the venture including researching, property sourcing, managing expenditure, budgets and accounts and dealing with all third parties (i.e. architects, surveyors, builders, accountants, tax advisors, IFAs, lettings and estate agents).

Mr Peter Binns - Project Manager With extensive experience in many aspects of building, including plumbing, electrics, joinery and bricklaying, and supporting a wealth of contacts in the trade, Peter can be called upon to realise any development project. His organisational and people management skills are exemplary having served in the military, and his current vocation (as a self-employed taxi driver) affords him with an unsurpassed knowledge of the local and surrounding areas.

Responsibilities/Involvement: Project Manager, sourcing and managing necessary labour and working alongside Mr Daniel Pinkney, with a view to becoming a future partner in the business. Likely to be paid on either a fee or commission basis (% of the net profit on completion) at the outset.

Mr John Whiteside, STED Construction design - Structural Engineer With over 40 years experience in structural engineering, and being self-employed for the vast majority of that time, John can be called on to visit prospective properties with Daniel and Peter to give an initial appraisal of the property and provide guidance to future prospects and probable costs. He also has a comprehensive database of contacts in the trade that can be utilised if and when required.

Mr Jamie Brown, Endeavour Partnership - Solicitor/Conveyancer Having worked with Daniel for the past few years Jamie has proved himself to be an efficient, quick and pro-active solicitor working on both business matters (employment/contracts) and personal matters (conveyancing). With clients in the property business, he can also provide invaluable advice and continuing guidance to the venture.

Benson Wood - Accountants / Tax Advisors / IFA / Business Advisors

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THE MARKET Market Segments / Buyer Profiles When planning a renovation project it must be carried out sympathetic to the target buyer profile. It is no good, for example, converting a building into a 2 bedroomed, contemporary apartment when the majority of people in the area are families with two or more children. Any project must cater for the needs and wants of the key segment in the respective area. In most cases there may be more than one buyer profile in which case a balance must be struck so that the property appeals to all these segments.

Typical Buyer profiles: Single male / female.

Young couple.

Young couple + child present or on way.

Growing family couple.

Middle aged couple, mature family size.

Mature family, kids leaving nest.

End of career couple.

Widow / widower.

Not moving.

Property Market in the North East We aim to develop in the North East and in particular Middlesbrough, Durham, Darlington and Hartlepool to begin with as we are local to all these areas. These areas are undergoing extensive redevelopment, especially in the Tees Valley area (www.teesvalleyregeneration.co.uk) plus house prices are relatively affordable and rental yields are comparitively high. The North East is also experiencing the fastest rate of employment compared to the rest of the UK (Labour Force Survey, April 2005) followed by Yorks & The Humber.

It is believed that Middlesbrough is a up and coming area (hotspot) due to several factors including DurhamTeesValley Airport2 (formerly Teesside Airport), the Millhaven project3, University of Teesside4, Middlesbrough College5 and James Cook University Hospital6. There are also several schemes run

by Middlesbrough Borough Council offering grants for repairs and improvements for housing in regeneration areas7. Durham has strong demand from an increasingly prosperous north-east professional and business community8. Darlington has one of the best transport infrastructures in the UK and a ÂŁ170m redevelopment is planned close to these transport links9. And Hartlepool has been redeveloped extensively recently into a prime North East tourist attraction and further ambitious plans to develop Victoria Harbour are underway10 We are also intent on pursuing the property market in Scarborough and Whitby (Yorks & Humber) both of which we are very familiar with. They both have a good balanced economy, good growth prospects and a continually growing tourist trade.

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Premium Versus Economy Markets At the level we propose to enter the market (sub £125k properties), we are effectively targeting the economy market. Whilst this is a growing and worthwhile market it can be difficult to 'add value' as these houses tend to have very tight price bands. For example in one street of terrace houses selling for around £50,000, it would be unlikely that doubling the property size and doing a complete makeover would raise the value much above £60,000 - these alterations would simply make it more saleable. That is why at this end of the market it is imperative to buy cheap (in relation to surrounding properties), renovate suitably and budget effectively to make a good profit. One advantage to this end of the market however, is that yields tend to be high and rental demand is prevalent so they will complement a rental portfolio well. Plus if the properties are located in a future hotspot they will still appreciate in capital value over time.

However, on gaining experience in the economy market (both B-D-S and B-D-L) we fully intend to enter the premium market. The reason for this is that premium locations can have demand at prices that seem ludicrously extreme. And whilst demand may be low, it only takes one buyer to make a sale. For example, in a street of houses worth £600,000+, it would be common for one particular house to go for £2million if it appeals to a certain buyer.

Two things to remember: 1. Property investment is not just about location - it is the right property in the right location that sells for the right price.

2. The key to maximum profit from renovation work is to find a property that has a potential selling price much in excess of its cost.

Property Investor News - Ongoing assessment of the Market To allow us to keep abreast of the property market and trends we currently subscribe to Property Investor News (PIN). This is the UK's most authoratative property investment publication giving analysis, news and research on Property Investment. A valuable guide to the property market, it is a monthly periodical which includes the latest news and information on:

Investment strategies Research tools Taxation and finance Auction data, monthly reports and auctioneers views Legal matters Location reports - UK, Europe and overseas UK residential and commercial market reports Strategies for investing overseas Assessing risk and reward in a more challenging investment environment

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PROSPECTS What are the aims of the business in the short/medium/long term?

Short term (1 year) To build a property portfolio generating a passive income of £10,000 per annum whilst building equity in excess of £200,000. In order to achieve this target in the first year, we envisage that the portfolio will require in the region of 20 properties.

Medium Term (2-3 years) By continuing the strategy adopted in the short term we aim to build the portfolio so that passive income generated by the end of year three is £30,000 per annum and equity in the portfolio is in excess of £750,000. To reach this target we estimate that the portfolio will require approximately 50 properties.

Note: It is during this period that Mr Peter Binns will be looking to become a partner/investor in the business. This could be accommodated by setting up a Tenants-in-Common partnership (with an agreed percentage split).

Long Term Term (3 years +) Dependent upon the market forces we will be looking to expand the portfolio to one that has in excess of £2million equity (in property valued @ £8 million) and a passive income exceeding £60,000 per annum.

We will be looking to extend development and renovation projects to throughout the UK (although on a much larger scale - this may involve new builds, land purchases, off-plan developments and commercial development). We will also looking for and investigating property opportunities further afield such as the EU8 countries (Estonia, Latvia, Lithuania, Czech Republic, Hungary, Poland, Slovakia and Slovenia) and other overseas opportunities. In doing so we foresee setting up separate investment companies to manage each portfolio effectively.

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COMPETITIVE BUSINESS STRATEGY Our Competitive Business Strategy revolves around our Mission Statement which is: “To offer More for Less�

This reflects many successful business models whereby they can offer more products/service at a reduced price thus securing the market share, and consequently profit margins will increase. As an example, Easyjet have access to more flights/tickets, so they can sell them at discount prices, thus more people will buy them, thus Easyjet begin to secure the market share.

With property this strategy involves buying properties that require renovation or development at well below the market value. In renovating or developing these properties we bring these up to market value securing locked in capital growth (i.e house value is worth over 20% more than the costs of purchasing and renovation). In doing so we can sell or let properties at slightly less than market value, still retaining a 20% profit margin. This means our properties will sell quicker and let quicker thus saving costs and maintaining a healthy profit margin (over 20%). In doing so the consumer also gets a newly renovated and refurbished house/rental property for less than the current market dictates. As our portfolio (and profits) increase so does our ability to offer cost-effective accommodation.

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FINANCIAL SECTION On a Typical £50,000 Investment Property: Purchase Price = £40,000.00 Purchase Costs = £1,450.00 Renovation Costs = £6,600.00 Total Property Cost = £48,050.00 Deposit / Investment = £9,610.00 Renovation Mortgage @ 80/20 LTV (Loan to Value) = £38,440.00 Minimum Future Value of Property = £57,660.00 (20% profit @ £9,610.00) Total Equity in Property (Deposit + Profit) = £19,220.00 We can then refinance the property based upon the new value (£57,660.00) at 80/20 LTV. This equates to a loan/mortgage of £46,128.00 and equity of £11,532.00. However as the total equity in the property is actually £19,220.00 we are able to release £7,688.00 (£19,220.00 - £11,532.00) to use as a deposit on the next development project.

We can then let this property which should command a rental value of £400pcm. The monthly income (profit) from letting the above property would be £55.19 (£400 - £344.81*). This is with locked in equity of £11,532.00 *Mortgage costs at 6.25% (1.5% above base rate) = £240.25pcm. Letting agency monthly fees @ 12.5% of gross rental value = £50pcm. Letting Agency Setup Fee = £8.34pcm. VAT on Lettings Fees = £10.21. Void periods @ 6% of gross rental value = £24.00pcm.

Building Insurance @ 0.25% of property value = £12.01pcm. Therefore monthly outgoings on property = £344.81.

Capital growth of rental property over the next 5 years: Predicted house increases in the next five years (taken from your www.yourmortgage.co.uk) 2006

2007

2008

2009

2010

Equivalent % per annum

Middlesbrough

0.3%

0.3%

2.1%

3.2%

3.1%

1.8%

Hartlepool

0.5%

0.6%

2.4%

3.5%

3.4%

2.1% pa

Durham

0.0%

-0.1%

1.7%

2.7%

2.7%

1.4% pa

Scarborough

0.3%

1.1%

3.0%

3.4%

3.1%

2.2% pa

Note: Even though these increases seem low in comparison to current Bank of England interest rates (4.75% pa). It must be remembered that the interest is on the full property value of £57,660 not the equity we have in the property (i.e £11,532.00). The property at an average of 1.8% pa would increase by £1,037.88 and rental income (profit) for that period would be £662.28 (£55.19 x 12) giving a total annual income of £1,700.16. In comparison the £11,532 equity if invested in the bank at 4.75% would generate only £547.77 pa.

Over the 5 year period a £57,660.00 property in Middlesbrough could increase in value to £63,014.51 (an increase of £5,354.51). Rental income for the same 5 year period would be £2,131.51 (see P21).

19

So over a 5 year period our original £9,610.00 investment turns into £28,307.85. This means a Return on Investment (ROI) of 194.6% or an annual equivalent return of 24.1%. However this does not take into account the release of £7,688.00 equity for investment into further properties which would accelerate the rate of return (by effectively gearing the investment) - see the cashflow forecast on pages 24-25.

Bank of England Interest Rates: When investing in property the Bank of England interest rates must always be considered. For example an increase of 1% in the base rate would mean an extra £38.44pcm on the a £46,128.00 mortgage. On a rental property with a low yield this could prove disastrous as we might end up having to supplement the rent to pay the mortgage, thus it turns into a cash-negative property (i.e costs us money to keep). This is why we search for properties that have a rental yield approaching 10% or more, as any rental income will be sufficient to withstand most increases in interest rates keeping the property generating a cash-positive rental income.

One thing to note is that as Interest rates rise, the letting market begins to thrive (as mortgages become less affordable) and as Interest rates fall the property market thrives (pushing house prices up). So a rental portfolio should always generate profit (be it through rental income or increases in capital value) Finance Requirement With an aim to purchase 3-6 developments from the outset from an initial investment of £50,000, and with a typical LTV of 80/20 we foresee initial borrowings of circa £200,000. We envisage this in the form of renovation mortgages (released in stages) with overdraft facilities to compensate.

On completion of the renovation stages and upon successful letting of these properties, we aim to refinance them to release capital for further investment. Therefore subsequent borrowings will be dependent upon the value of this released capital.

As we aim to purchase and renovate on average two properties a month rather than all five in one go, we will be able to continually reassess our budgets and therefore cashflow will be far easier to manage and control.

20

A Typical £50,000 Investment Property: £50,000 Development with a 10% rental yield Purchase Costs Purchase Price (PP) Solicitors Fees (1.8% of PP) Stamp Duty

£40,000.00 £720.00 £0.00

Building Survey

£480.00

Mortgage Arrangement Fee

£250.00

Renovation Costs Renovation Budget @ 15% PP (RB)

£6,000.00

Contingency Fund (@ 10% of RB)

£600.00

Total Property Costs (TPC)

A two bedroomed end-terraced currently up for £49,950 in Eston, Middlesbrough, TS6.

£48,050.00

Five Year Projection: Finance Breakdown Deposit (20%)

£9,610.00

Borrowing/Loan (80%)

£38,440.00

Minimum Future Value (TPC + 20%)

£57,660.00

Gross Profit

£9,610.00

Total Equity in Property

£19,220.00

Refinancing MFV at 80/20 LTV Equity Released

Rental Value (RV) - per annum

Rental Income Rental Profit (Yr 1)

£662.28

Rental Profit (Yr 2) +6%

£702.02

Rental Profit (Yr 3) +6%

£744.14

Rental Profit (Yr 4) +6%

£788.79

Rental Profit (Yr 5) +6%

£836.11

Total Rental Profit (5 years)

£3,733.34

Capital Growth (using M’bro figures) Yr 1 (0.3%)

£57,832.98

£46,128.00 / £11,532.00

Yr 2 (0.3%)

£58,006.48

£7,688.00

Yr 3 (2.1%)

£59,224.61

Yr 4 (3.2%)

£61,119.80

Yr 5 (3.1%)

£63,014.51

Capital Increase (5 years)

£5,354.51

Total Return in 5 years (inc. Equity of £19,220*)

£28,307.85

Original Investment

£9,610.00

Profit

£18,697.85

£4,800.00

Monthly Rental (MR)

£400.00

Gross Yield (RV x 100 / TPC)

9.98%

Letting Costs (per month) Loan Costs (@ 1.5% over base)

£240.25

Letting Agency - Monthly Fees (12.5%)

£50.00

Letting Agency - Setup Fee (25% of MR)

£8.34

Letting Agency - 17.5% VAT on all Fees

£10.21

Void Periods (6%)

£24.00

Building Insurance (0.25% of MFV)

£12.01

Total Letting Costs (per month)

£344.81

Return on Investment (ROI)

194.6%

Rental Profit (per month)

£55.19

Equivalent Annual Return

24.1%

*In reality £7,688.00 of this figure would be released to form the deposit for the next property. So in effect the return would be far greater than stated above due to gearing the investment - See cashflow on Pxx.

21

A Typical £60,000 Investment Property: £60,000 Development with a 9% rental yield Purchase Costs Purchase Price (PP) Solicitors Fees (1.8% of PP) Stamp Duty

£50,000.00 £900.00 £0.00

Building Survey

£480.00

Mortgage Arrangement Fee

£250.00

Renovation Costs Renovation Budget @ 15% PP (RB)

£7,500.00

Contingency Fund (@ 10% of RB)

£750.00

Total Property Costs (TPC)

A two bedroomed house currently up for £60k in Scarborough, YO11.

£59,880.00

Five Year Projection: Finance Breakdown Personal Deposit (20%)

£11,976.00

Borrowing/Loan (80%)

£47,904.00

Minimum Future Value (TPC + 20%)

£71,856.00

Gross Profit

£11,976.00

Total Equity in Property

£23,952.00

Refinancing MFV at 80/20 LTV Equity Released

Rental Value (RV) - per annum

Rental Income Rental Profit (Yr 1)

£378.12

Rental Profit (Yr 2) +6%

£400.81

Rental Profit (Yr 3) +6%

£424.86

Rental Profit (Yr 4) +6%

£450.35

Rental Profit (Yr 5) +6%

£477.37

Total Rental Profit (5 years)

£2,131.51

Capital Growth (using M’bro figures) Yr 1 (0.3%)

£72,071.57

£57,484.80 / £14,371.20

Yr 2 (0.3%)

£72,287.78

£9,580.80

Yr 3 (2.1%)

£73,805.83

Yr 4 (3.2%)

£76,167.61

Yr 5 (3.1%)

£78,528.81

Capital Increase (5 years)

£6,672.81

Total Return in 5 years (inc. Equity of £23,952*)

£32,756.32

Original Investment

£11,976.00

Profit

£20,780.32

£5,400.00

Monthly Rental (MR)

£450.00

Gross Yield (RV x 100 / TPC)

9.02%

Letting Costs (per month) Loan Costs (@ 1.5% over base)

£299.40

Letting Agency - Monthly Fees (12.5%)

£56.25

Letting Agency - Setup Fee (25% of MR)

£9.38

Letting Agency - 17.5% VAT on all Fees

£11.49

Void Periods (6%)

£27.00

Building Insurance (0.25% of MFV)

£14.97

Total Letting Costs (per month)

£418.49

Return on Investment (ROI)

173.5%

Rental Profit (per month)

£31.51

Equivalent Annual Return

22.3%

*In reality £9,580.80 of this figure would be released to form the deposit for the next property. So in effect the return would be far greater than stated above due to gearing the investment.

22

A Typical £70,000 Investment Property: £70,000 Development with an 8% rental yield Purchase Costs Purchase Price (PP)

£60,000.00

Solicitors Fees (1.8% of PP)

£1,080.00

Stamp Duty

£0.00

Building Survey

£480.00

Mortgage Arrangement Fee

£250.00

Renovation Costs Renovation Budget @ 15% PP (RB)

£9,000.00

Contingency Fund (@ 10% of RB)

£900.00

Total Property Costs (TPC)

A six bedroomed terraced house currently up for £67,950 in Hartlepool, TS24.

£71,710.00

Five Year Projection: Finance Breakdown Personal Deposit (20%)

£14,342.00

Borrowing/Loan (80%)

£60,953.50

Minimum Future Value (TPC + 20%)

£86,052.00

Gross Profit

£14,342.00

Total Equity in Property

£28,684.00

Refinancing MFV at 80/20 LTV Equity Released

Rental Value (RV) - per annum

Rental Profit (Yr 1)

£94.20

Rental Profit (Yr 2) +6%

£99.85

Rental Profit (Yr 3) +6%

£105.84

Rental Profit (Yr 4) +6%

£112.19

Rental Profit (Yr 5) +6%

£118.93

Total Rental Profit (5 years)

£531.01

Capital Growth (using M’bro figures) Yr 1 (0.3%)

£86,310.16

£68,841.60 / £17,210.40

Yr 2 (0.3%)

£86,569.06

£11,473.60

Yr 3 (2.1%)

£88,387.04

Yr 4 (3.2%)

£91,215.42

Yr 5 (3.1%)

£94,043.10

Capital Increase (5 years)

£7,991.10

Total Return in 5 years (inc. Equity of £28,684*)

£37,206.11

Original Investment

£14,342.00

Profit

£22,864.11

Return on Investment (ROI)

159.4%

Equivalent Annual Return

21.0%

£6,000.00

Monthly Rental (MR)

£500.00

Gross Yield (RV x 100 / TPC)

8.36%

Letting Costs (per month) Loan Costs (@ 1.5% over base)

£358.55

Letting Agency - Monthly Fees (12.5%)

£62.50

Letting Agency - Setup Fee (25% of MR)

£10.41

Letting Agency - 17.5% VAT on all Fees

£12.76

Void Periods (6%)

£30.00

Building Insurance (0.25% of MFV)

£17.93

Total Letting Costs (per month)

£492.15

Rental Profit (per month)

Rental Income

£7.85

*In reality £11,473.60 of this figure would be released to form the deposit for the next property. So in effect the return would be far greater than stated above due to gearing the investment.

23

CASHFLOW FORECAST – Based upon £50k Renovation Properties only 1-5

6-9

10-12

13-14

5

4

3

2

£38,440.00

£30,752.00

£23,064.00

£200,000.00

£160,000.00

£120,000.00

£80,000.00

£3,600.00

£2,880.00

£2,160.00

£1,440.00

£0.00

£0.00

£0.00

£0.00

Building Survey

£2,400.00

£1,920.00

£1,440.00

£960.00

Mortgage Arrangement Fee

£1,250.00

£1,000.00

£750.00

£500.00

Renovation Budget @ 15% PP (RB)

£30,000.00

£24,000.00

£18,000.00

£12,000.00

Contingency Fund (@ 10% of RB)

£3,000.00

£2,400.00

£1,800.00

£1,200.00

£240,250.00

£192,200.00

£144,150.00

£96,100.00

No. of Properties Released Equity Brought Forward Purchase Costs Purchase Price (PP) Solicitors Fees (1.8% of PP) Stamp Duty

Renovation Costs

Total Property Costs (TPC) Finance Breakdown Personal Deposit (20%)

£48,050.00

£0.00

£0.00

£0.00

£0.00

£38,440.00

£28,830.00

£19,220

£192,200.00

£153,760.00

£115,320.00

£76,880.00

£1,950.00

£1,950.00

£3,872.00

£7,716.00

£288,300.00

£230,640.00

£172,980.00

£115,320.00

Gross Profit

£48,050.00

£38,440.00

£28,830.00

£19,220.00

Total Equity in Property

£96,100.00

£76,880.00

£57,660.00

£38,440.00

Refinancing MFV at 80/20 LTV (Loan)

£230,640.00

£184,512.00

£138,384.00

£92,256.00

Refinancing MFV at 80/20 LTV (Equity)

£57,660.00

£46,128.00

£34,596.00

£23,064.00

Equity Released

£38,440.00

£30,752.00

£23,064.00

£15,376.00

Rental Value (RV) - per annum

£24,000.00

£19,200.00

£14,400.00

£9,600.00

Monthly Rental (MR)

£2,000.00

£1,600.00

£1,200.00

£800.00

Released Equity / Reserve Funds (20%) Borrowing/Loan (80%) Reserve Funds

Minimum Future Value (TPC + 20%)

Letting Costs (per month) Loan Costs (@ 1.5% over base)

£1,201.25

£961.00

£720.75

£480.50

Letting Agency - Monthly Fees (12.5%)

£250.00

£200.00

£150.00

£100.00

Letting Agency - Setup Fee (25% of MR)

£41.70

£33.36

£25.02

£16.68

Letting Agency - 17.5% VAT on all Fees

£51.05

£40.84

£30.63

£20.42

Void Periods (6%)

£120.00

£96.00

£72.00

£48.00

Building Insurance (0.25% of MFV)

£60.05

£48.04

£36.03

£24.02

Total Letting Costs (per month)

£1,724.05

£1,379.24

£1,034.43

£689.62

Rental Profit (per month) Rental Profit (per year)

£275.95

£220.76

£165.57

£110.38

£3,347.40

£2,649.12

£1,986.84

£1,324.56

24

CASHFLOW FORECAST – Continued 15-16

17-18

19

20

2

2

1

1

£15,376.00

£15,376.00

£15,376.00

£7,688.00

–

Purchase Price (PP)

£80,000.00

£80,000.00

£40,000.00

£40,000.00

£800,000.00

Solicitors Fees (1.8% of PP)

£1,440.00

£1,440.00

£720.00

£720.00

£14,400.00

£0.00

£0.00

£0.00

£0.00

£0.00

Building Survey

£960.00

£960.00

£480.00

£480.00

£9,600.00

Mortgage Arrangement Fee

£500.00

£500.00

£250.00

£250.00

£5,000.00

Renovation Budget @ 15% PP (RB)

£12,000.00

£12,000.00

£6,000.00

£6,000.00

£120,000.00

Contingency Fund (@ 10% of RB)

£1,200.00

£1,200.00

£600.00

£600.00

£12,000.00

£96,100.00

£96,100.00

£48,050.00

£48,050.00

£961,000.00

No. of Properties Released Equity Brought Forward Purchase Costs

Stamp Duty

Renovation Costs

Total Property Costs (TPC) Finance Breakdown

£0.00

£0.00

£0.00

£0.00

£48,050.00

£19,220

£19,220

£9,610.00

£9,610.00

£192,200.00

Borrowing/Loan (80%)

£76,880.00

£76,880.00

£38,440.00

£38,440.00

£768,800.00

Reserve Funds

£3,872.00

£28.00

£5,794.00

£3,872.00

–

£115,320.00

£115,320.00

£57,660.00

£57,660.00

£1,153,200.00

Gross Profit

£19,220.00

£19,220.00

£9,610.00

£9,610.00

–

Total Equity in Property

£38,440.00

£38,440.00

£19,220.00

£19,220.00

–

Refinancing MFV at 80/20 LTV (Loan)

£92,256.00

£92,256.00

£46,128.00

£46,128.00

£922,560.00

Refinancing MFV at 80/20 LTV (Equity)

£23,064.00

£23,064.00

£11,532.00

£11,532.00

£230,640.00

Equity Released

£15,376.00

£15,376.00

£7,688.00

£7,688.00

–

£9,600.00

£9,600.00

£4,800.00

£4,800.00

£96,000.00

£800.00

£800.00

£400.00

£400.00

£8,000.00

Loan Costs (@ 1.5% over base)

£480.50

£480.50

£240.25

£240.25

£4,805.00

Letting Agency - Monthly Fees (12.5%)

£100.00

£100.00

£50.00

£50.00

£1,000.00

Letting Agency - Setup Fee (25% of MR)

£16.68

£16.68

£8.34

£8.34

£166.80

Letting Agency - 17.5% VAT on all Fees

£20.42

£20.42

£10.21

£10.21

£204.20

Void Periods (6%)

£48.00

£48.00

£24.00

£24.00

£480.00

Building Insurance (0.25% of MFV)

£24.02

£24.02

£12.01

£12.01

£240.20

Total Letting Costs (per month)

£689.62

£689.62

£344.81

£344.81

£6,896.20

Personal Deposit (20%) Released Equity / Reserve Funds (20%)

Minimum Future Value (TPC + 20%)

Rental Value (RV) - per annum Monthly Rental (MR) Letting Costs (per month)

Rental Profit (per month) Rental Profit (per year)

£110.38

£110.38

£55.19

£55.19

£1,103.80

£1,324.56

£1,324.56

£662.28

£662.28

£13,245.60

25

APPENDICES 1. Over the past 30 years the average UK house price has risen from £11,519 (1976 Q1) to £160,035 (2006 Q1), this equates to a rise in value of over 9.1% per annum*. Over the last 2 years house prices have risen from £140,225 to £160,035, equating to 6.9% per annum. This trend is set to continue with the National Housing Federation forecasting a 50% increase in house prices in the next six years, again equating to a rise of 6.9% per annum†. These statistics show why property continues to be a sound long term prospect regularly outperforming other investments such as the stock market, bonds and equities. * figures sourced from http://www.nationwide.co.uk/hpi/historical.htm † House prices to soar 50% within six years...

Average price estimated to reach £300,000 by 2012 Typical property will cost nine times annual salary

By John Carvel, social affairs editor Monday July 17, 2006 The Guardian The average house price in England will rise by more than 50% to top £300,000 within six years, according to econometric forecasts by the National Housing Federation.

It said the further boost to property prices might be reassuring for owners who borrowed heavily to get on to the housing ladder.

But the federation, representing 1,400 housing associations, warned that it “spells disaster for tomorrow’s first time buyers who will find it increasingly difficult to afford a place of their own”.

The projections show the average house price will rise from just under £195,000 in the first quarter of 2006 to £303,900 by 2012.

With average annual earnings forecast to reach £32,188 by that date, the average house will be nine and a half times salary.

The findings were based on an analysis by Oxford Economic Forecasting, an independent group whose housing market model is being used by the government to work out the policy implications of Kate Barker’s review of housing supply.

The report said: “Young working couples, key workers and people on low incomes have little chance of fulfilling their home ownership dream without financial support from parents or the state.

“This can have serious social consequences for the birth rate, for keeping essential public workers in high housing cost areas, for government expenditure and for the UK’s business competitiveness.”

David Orr, the federation’s chief executive, said: “We are already in a housing crisis and this report shows things are getting worse.

High house prices are already having a disastrous effect on local communities. Over the next six years we’ll see home ownership being pushed further out of the reach of middle earners and even those on relatively high incomes.”

Mr Orr appealed to the Treasury to double the supply of affordable rented accommodation. He said housing associations build and refurbish about 40,000 homes a year for rental and low-cost ownership. To meet housing need, this should rise to 80,000 and the resources should be made available in next year’s comprehensive spending review. There should also be reform of the planning laws to speed up the delivery of affordable homes in mixed communities, he said.

The forecast of the £300,000 house was based on an assumption that interest rates would average about 4.5% for the six years to 2012. According to OEF’s analysis, there is enough spare capacity in the economy to allow growth to continue without triggering mortgage rate rises.

The forecasters expect earnings to grow between 4.1% and 4.4% a year over the period, but house prices will rise more quickly, with increases averaging 7% a year after 2008. The forecasters note that 154,870 new homes were built in 2004/5, but the government’s latest household projections indicate a need to build an average of 209,000 new homes a year to satisfy demand over the next 20 years.

“The government’s response to the Barker report seeks to raise housebuilding totals to 200,000 a year within 10 years. But, in the interim, we will continue to create an even larger shortfall of housing and struggle to create truly sustainable communities,” the report said.

House prices were also being distorted by an increasing volume of buy-to-let. First-time buyers accounted for less than 30% of home purchases in 2005, compared with 50% in 1995.

The OEF concluded that, with short supply and high levels of consumer confidence, there would be nothing to stop the average house price climbing above £300,000. It noted that in more than 10% of local authority areas in England, average house prices were already more than 10 times local incomes.

Steve Wilcox, professor of housing policy at York university, said the OEF’s forecasts appeared to be robust if the underlying economic projection was sound.

Home truths House prices in England rose 6% last year - three times CPI inflation Average house prices have risen by 139% since Labour came to power in 1997. Earnings have risen by 24%

26

First-time buyers accounted for 30% of home purchases in 2005, compared with 50% in 1995 115,352 mortgage repossession proceedings were issued in 2005, a jump of 48% on 2004 The number of households waiting for a suitable affordable home on housing registers is now more than 1.5m - a rise of nearly 50% since 2000 2. In September 2004 Teesside International Airport ushered in a new era and changed its name to Durham Tees Valley Airport. The new name was part of an ambitious three year, multi-million pound redevelopment plan by the airport and its strategic regional partners to build on past successes and reinforce its position as one of the UK’s fastest-growing regional airports.

12th July 2006: Eastern Airways will launch its first ever international flights from Durham Tees Valley Airport to Brussels. Keith Watson, Eastern Airways’ head of sales & marketing, said: “Our new Brussels service is fantastic news for Tees Valley and County Durham business travellers as they will save time by conveniently flying from Durham Tees Valley airport. There has been a lot of interest for this route from the region’s business community and it will help to strengthen business links with one of Europe’s most important cities, while enabling travellers to get there and back in a day. Feedback from key employers in the region confirms that the route is strategically important for the successful development of many local industries and the new service will deliver valuable time savings for business travellers.”

Passenger throughput: 2002:683,947, 2003:712,394 (4.16% increase), 2004:808,000 (13.42% increase), 2005:906,000 (12.12% increase). New Terminal facade and extension will be completed during 2006 and major planning application submitted for a new terminal building to accomodate up to 3 million passengers. Information from http://www.azworldairports.com/ 3. The Middlehaven project boasts a 250 acre development has a public and private sector investment of £500m, up to 3,000 new jobs created, 2,400 homes (built over 20 years), 800 square feet of commercial office development, and significant leisure proposals such as hotels, bars and restaurants. This type of development will only help push up local property values and rental incomes.

4. Over £21m will be invested in 2006-07 on two new developments on campus - a £12m Institute of Digital Innovation and a £9m Centre for Creative Technologies. Both will enhance Teesside’s reputation as a leading university for digital technology and digital media 5. A NEW college built to turn heads and fill minds is to be delivered as part of the realisation of the Middlehaven masterplan. The £70m Middlesbrough College will be of iconic design to fit in with the rest of Tees Valley Regeneration’s vision for the site - planned to be of international architectural significance. And state-of-the-art teaching and learning environments will mean Middlesbrough students will have amenities to rival anywhere in the UK. The five storey visually stunning building will house 17,000 students and 1,000 staff. The 30,000 square metre college will be environmentally friendly in both initial design and for future use. Middlesbrough College principal John Hogg said: “This development will become a symbol for regeneration for Middlesbrough and the Tees Valley.

“It will provide a learning environment which is clearly of the 21st Century and will enable students to access state-of-the-art resources. We want future generations to look not just at a building but to what is truly Middlesbrough’s college.”

Joe Docherty, chief executive of Tees Valley Regeneration, said: “The college is a vital part of the Middlehaven jigsaw. The design reflects the vibrancy and youth that Midddlehaven will encapsulate as soon as it becomes home to 17,000 students - of whatever age. “Our role has been to facilitate and guide the design to ensure the scheme fits in with the quality, ethos and masterplan for Middlehaven. . . and to ensure delivery.”

Middlesbrough Mayor Ray Mallon said: “The college will be one of the cornerstones of the Middlehaven development. It will be a marvellous environment for people to fulfill their learning potential.”

Steve Gawthorpe, area director North East, English Partnerships said: “This development shows what a bright future there is for Middlehaven, following on from the Terrace Hill development this is a key component of the regeneration of this important site. The college will become an important destination within Middlesbrough.”

Pam Eccles, executive director, LSC Tees Valley said: “The LSC is delighted to support and finance Middlesbrough College’s relocation to such a futuristic and vibrant new location. We believe that this new development will provide an excellent environment for learning.”

John Holmes, director of regeneration and tourism at One NorthEast said: “The consolidation of Middlesbrough College is an integral part of the masterplan for Middlehaven which will ultimately see the creation of around 3,000 new jobs and a much-envied destination of international stature. First-class educational premises are essential for the continued growth and success across the North East and the design of the college will inspire students to fulfil their potential and take pride in their learning environment which is part of an exciting project set to become the epitome of first-class regeneration and development.”

6. The James Cook University Hospital is a district general hospital for around 300,000 people living in Middlesbrough and the local authority area of Redcar and Cleveland. The James Cook University Hospital merged with the Friarage Hospital, Northallerton, in April 2002. The Friarage Hospital provides a district general hospital service for a population of 122,000, stretching from the North Yorkshire Moors to the Central Pennines, the borders of York District in the South, and the borders of Darlington in the North.

The 7,000-strong workforce provides a range of highly specialist services extending to 1.5 million people in Teesside and parts

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of Cumbria, Durham, and North Yorkshire. These services include treating heart disease, cancer, renal services, neurology, and neurosurgery. The newest of these services is the North of England Spinal Injuries Centre. We are also a cancer centre and a cancer unit for the common cancers and the focus for the Cancer Care Alliance of Teesside, South Durham, and North Yorkshire 7. The Renewal Grants Agency is responsible for the administration of the council’s grants budget. The agency staff will survey properties, complete the necessary paperwork, request estimates and monitor works on site to their successful conclusion to allow private sector properties to be repaired or improved. If you require any further information regarding the work of the agency as a whole please contact: Andrew Carr, Renewal Grants Agency Manager on 264532 Grants are available to owner-occupiers and landlords within declared Renewal Areas. Each year a block of properties are offered grants to undertake repairs/improvements. For owner occupiers the grants are subject to a statutory means test which may require a contribution to be made towards the cost of the works. Landlords are required to make a contribution of 25% of the cost of the works. If you require any further information please contact: Alan Jones, Renewals Officer on 264509 8. Integrated Regeneration in County Durham is a combined round 5 and round 6 Single Regeneration Budget (SRB) Programme.

It has been allocated £45 million of SRB grant, bringing in match funding of £53 million other public sector and £20 million private sector funding.

The purpose of the Programme is to provide a strategic and co-ordinated approach to the problems associated with the decline of the Durham coalfield, rural areas in County Durham, recent factory closures and those areas which display high levels of need in County Durham. Within the target area, these problems are often inter-related and in many instances impact on the same localities.

The Programme vision, as agreed by partners is as follows: ‘To achieve sustainable improvements in the overall social well being environmental quality and economic competitiveness of the Area, enabling a full and satisfying quality of life for the people of County Durham.’

The Programme is delivered through a series of packages of projects. There is a thematic package of projects which is delivered strategically across the most disadvantaged parts of the Area. This is co-ordinated with local packages that address localised need.

This approach provides both an integrated and strategic response to the regeneration of the Area.

9. Central Park will provide:

600 new homes including family town houses and apartments Around 2000 jobs A combined investment of £170M (majority from private sector) New site for Darlington College A range of leisure and community facilities Green open space and a sculpture park High quality four and five storey office buildings

We’re on the right track Central Park is a brand new development in Darlington which is definitely going somewhere...

Situated right next to the railway station it is ideally located and will feature new offices, residential apartments and homes, public spaces, a new college and a spectacular sculpture park. Darlington is already at the centre of one of the best transport infrastructures in the UK and this development will be right in the middle of the action. The site has easy access to the East Coast Mainline and coast-to-coast railway services. It is also close to the A1, M1 and A66 trunk roads and a short drive to the blossoming Durham Tees Valley Airport. The town is well known as a national hub, almost exactly half way between Edinburgh and London - ideal as a meeting place for businesses and anyone who is truly going places. But there is nothing middling about the Central Park scheme. In keeping with Tees Valley Regeneration’s determination to deliver top quality architecture, landscape and functional developments the new scheme will be bold and imaginative. The design is stylish with a modern edge bringing traditional uses upto-date. A spectacular footbridge and sculpture park will complement landscaped areas linking the 75 acre site together.

Tees Valley Regeneration, together with partners Darlington Borough Council, One NorthEast, English Partnerships, Darlington College and Tees Valley Partnership have worked hard to deliver plans for the development which is set to include beautiful new homes, a public park, playgrounds, a pedestrian and cycle path, a doctors’ surgery and a nursery. There will also be good parking plus plans for a hotel and conference centre close to an impressive new link to the railway station.

The site will also be home to the new Darlington College when the present college moves to its state-of-the-art new premises later in 2006.

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Central Park means an investment of around £170m with the majority coming from the private sector. In addition it is believed the site will generate around 2000 jobs.

Chief executive of Tees Valley Regeneration, Joe Docherty, said: “Central Park, Darlington is a project we can all be proud of. It combines a brilliant location, excellent transport links, a skilled and committed workforce, with living, working and leisure facilities that will be second to none. Central Park will help transform both the image and reality of Darlington and the Tees Valley. People from outside the area are already starting to think about the Tees Valley in a far more positive way, and ambitious projects like this are the reason why.”

Central Park evolved from the Tees Valley Partnership’s vision and its Darlington Gateway initiative. Other projects stemming from the initiative include: Argos Direct and West Park coming to life at Faverdale, plus continuing improvements to the town centre.

Purpose To make the most of the potential of its location as a strategic centre of communications, Darlington needs to meet an unfulfilled requirement for high quality office accommodation. The town is the second largest retail destination in the Tees Valley, has a thriving cultural scene and retains a pleasant and thriving market town atmosphere. Not surprisingly, demand for quality housing is also rising. The Central Park site provides both a commercial and residential solution in one.

Position This 30 hectare town centre site borders the railway immediately North of the East Coast Main line station. The tremendous frontage along the railway line provides a window into the Tees Valley that will be seen by thousands of travellers every day. The site will be made available by the departure of a Council depot from Council owned land, the acquisition of land from Rail Property Services and subsequent sale of 6.5 hectares to Darlington College of Technology. Tees Valley Regeneration is working with partners One NorthEast, English Partnerships and Darlington Council on the redevelopment project, one of the five strategic sites in our £1.5 billion investment programme.

Plan The site has the potential to provide up to 28,000 sq m of much needed new modern office accommodation, 600 apartment and town house homes and a hotel and conference centre strategically juxtaposed with the station.

The cornerstone will be a new £33 million home for Darlington College of Technology. The campus will comprise a variety of learning complexes including: further education facilities, a centre delivering higher education courses in conjunction with the University of Teesside, Technology Centre, Media Centre, food court and restaurant. Its childcare facility and a sports and leisure complex will be shared with the community, making the Central Park life-style even more attractive.

Progress

Work on the new college is well underway and on schedule to open in autumn 2006.

Conditional planning consent has been granted on the scheme.

The overhead power lines which cris-crossed the site have been under grounded.

Junction improvements are underway at the Haughton road end of the site to open up access for both the college and the wider site.

Expressions of interest are being sought for from developers for the development of the site.

10. The masterplan for Victoria Harbour in Hartlepool creates a superb new area of Hartlepool in which to live, work and play. The scheme is a £500m joint development between Tees Valley Regeneration and land owners PD Ports, Logistics & Shipping. The development will protect the existing port employment, whilst opening up some 200 acres (81 hectares) of prime seafront land to the public for the first time.

A new school, quality homes such as family townhouses and chic apartments, offices and attractively landscaped green open space are just some of the features proposed in the plans.

An attractive coastal path and innovative bridge across the harbour entrance for pedestrians and cyclists will also link the Headland to the site and bring the whole of Hartlepool into the scheme.

But one of the most striking and talked about elements of the design is the ‘wave’, a stunning architectural concept for the public that combines landscaped parkland, water features and public art and will separate the new residential developments from the existing commercial areas.

Purpose The Victoria Harbour project covers an area of 120 hectares adjacent to the centre of Hartlepool. Two thirds of the existing dock is currently under-used and therefore presents a fantastic opportunity to continue the regeneration of Hartlepool. The project will develop a whole new community for the town bringing increased prosperity to the area and developing a scheme of outstanding quality to complement Hartlepool’s increasing tourism offer.

The site lies to the north of the town centre between the highly successful Marina and the historic Headland. It is owned by PD Ports, Logistics and Shipping but the port operation only requires a third of the land. The remaining 80 hectares represents a breathtaking development opportunity. Tees Valley Regeneration is leading the project alongside the landowners, English Partnerships and One North East. Victoria Harbour is one of the five strategic sites in our £1.5 billion investment programme.

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Plan This £400 million scheme is for a mix of uses with an emphasis on residential development. Existing businesses will be retained where possible, and there will be attractions of a quality to tempt visitors and businesses from the region and beyond, emulating the success of the Historic Quay and the Marina which is currently the work base for over 2,600 people.

The number of homes could eventually reach 3,000 units, including impressive apartments and town houses offering “urban living” of a style not presently available in the town, or indeed the Tees Valley. The homes will be ideal for walking to work in the town centre and popping into quality neighbourhood bars or bistros.

An innovative pedestrian and cycle bridge, engineered to allow the passage of ships, will link the Headland to the site and along a new harbour front to the Marina.

One awe-inspiring design feature which underlines the quality of the scheme is The Wave, combining landscaped parkland, water features and public art which will flow through the development.

Progress

A team of experts in waterfront regeneration led by the Halcrow Group and including SOM have prepared the masterplan.

Design guidance is being produced which will capture the quality of development expected at Victoria Harbour and specify the exciting areas of new public realm which will be created.

We are pursuing the possibility of developing an “H2O centre” a water based leisure facility for the town.

Conditional planning permission has been granted.

Government Home Information Packs (HIP) - June 2007 With the Government introducing Home Information Packs (HIP) in June 2007 to accompany all residential home sales (at a cost of approx £500-600 to the seller). This can be beneficial in that contracts can be changed quicker and completion achieved earlier (even though this will lead to a lot of additional paperwork). One of the UK’s largest estate agents backs the Government’s move.

Jane Pridgeon, managing director of Halifax Estate Agents, said: “What should be remembered is that the HIP is designed to make sales go through faster and reduce the number of sales that fall through. The Government estimates that around 30% of all property sales fall through each year at a cost of £350 million to consumers. Without the HIP, the house buying process will continue to be dragged down by the slowest link in the chain and money will continue to be wasted on sales that fall through.”

Full List of Business Advisors Mr Trevor Lailey (IFA) - trevorlailey@thinkpositive.co.uk Mr Jamie Brown (Solicitor) - j.brown@endeavour-partnership.com

Books/Publications How to Make Money from Property: The Expert Guide to Propert Investment. ISBN 1857036271.

How to Make Money from Your Property. Add pounds to the Value of Your Property. ISBN 074992280X. “Property Ladder” The Developer’s Bible (Sarah Beeny). ISBN 1844034194.

The Complete Guide to Investing in Property. ISBN 0749444932.

Sarah Beeny’s Price the Job. ISBN 1843403609.

Need to Know? Property. ISBN 000720776X. Rich Dad, Poor Dad. ISBN 0446677450.

Rich Dad’s Guide to Investing. ISBN 0751533165.

Property Auction News - Monthly periodical.

Council Tax Refences http://www.upmystreet.com/ http://www.voa.gov.uk/cti/ http://www.tameside.gov.uk/fingen/new/ctaxbands.html

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Conveyancing http://www.clickconveyancing.co.uk http://www.conveyancingbrokers.co.uk/purchase.php http://www.ims-mortgages.co.uk http://www.conveyancingsolicitors.biz

Property Market http://www.upmystreet.com/ http://www.rightmove.co.uk http://www.findaproperty.com/ http://www.vebra.com/ http://www.propertyfinder.com/ http://www.hometrack.co.uk/ http://www.landregisteronline.gov.uk/

Property Market (Regional) http://www.sqftmag.com http://www.pickupaproperty.com/

Development http://www.rics.org/NewHome

Auctions http://www.barnardmarcusauctions.co.uk/ http://www.pattinson.co.uk/ http://www.auctionsnortheast.co.uk/welcome.htm http://www.markjenkinson.co.uk/ http://www.eddisons.com http://www.pugh-company.co.uk/

Letting Resources http://www.residentiallandlord.co.uk/ http://www.naea.co.uk/ http://www.arla.co.uk/

Finance http://www.bankofengland.co.uk/ http://www.buy-let-mortgage.co.uk/ http://www.yourmortgage.co.uk/ http://www.moneysupermarket.com/loans/ http://www.propertyfinancespecialist.co.uk/

Other http://www.propertysecrets.net/ http://www.multimap.com/

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Other Press Articles Hot houses Sep 5 2005 Sandy Mckenzie, Evening Gazette Central Middlesbrough - where 1,500 homes are earmarked for demolition - has been pinpointed as the property hotspot of the North-east.

The area is also placed second in the UK in a study of areas with the most potential for first-time buyers.

The survey was conducted by the Royal Bank of Scotland and aims to identify the most promising property hotspots in the region and the country. It says TS1 is “an ideal place for today’s first time buyers to invest” “Growth over the past 12 months is almost double the national average and the price-earnings ratio is relatively low.

These factors, combined with large-scale regeneration programmes that have provided £500m investment across Middlesbrough, have helped to make Teesside a great investment for those about to purchase their first home,” it says.

Campaigners say the results expose the “smokescreen” made by Middlesbrough council chiefs, who claim there is no demand for homes in Gresham - an area earmarked for demolition, which sits at the heart of TS1.

Anti-demolition campaigner and Gresham ward councillor Ken Walker said: “The results of this survey vindicate our argument.

We and the residents have been saying that house prices have rocketed in the last 18 months and the sales of properties had never been so healthy until the bombshell of July 20 when the council announced the details of the proposed demolitions.

“I do not find the survey results surprising. The survey demonstrates these proposals were never about the housing stock, which overall is sound.

“In the ‘Gems’ streets, houses were fetching around £50,000 and in other parts of the demolition area houses were selling for around £60,000.

Eighteen months ago you would have struggled to get £20,000. Is all that an indication of a market where the bottom has fallen out?” said Cllr Walker.

Middlesbrough Council’s Executive councillor for regeneration, Dave Budd, says the essence of the survey results is that houses in central Middlesbrough area are cheap.

He said: “To provide the quality of life for people in the area, it was necessary to tackle the problem of too many terraced houses for the number of people wanting to live in them.

“In essence what this survey says is that houses in Central Middlesbrough area cheap.

We knew that already and we also know from independent, detailed research that traditional first-time buyers - families we want to attract to this area - are not the people who are snapping them up.

The survey is quite right when it refers to Middlesbrough’s huge potential and massive investment that is being put in.

“Our plans for housing in the inner area, with 750 new homes and a major improvement of the local environment are part and parcel of these plans but they will not create the quality of life we all want unless we tackle the fact there are more terraced houses in the area than there are people wanting to live there.”

The hotspot index reveals the most crucial aspects, determining the future return on investment, are the low house prices to high income ratio and the recent house price growth rate of an area alongside any regeneration prospects.

In the North-east the survey also puts North Ormesby in third. Hartlepool is 6th, Ferryhill 7th and East Central Middlesbrough 9th.

The TS1 postcode area includes five Middlesbrough wards - Middlehaven, Gresham, University, Park and Linthorpe.

Government cash for scheme Jun 21 2006 Sandy Mckenzie, Evening Gazette A key £18.25m cash package which will help start a controversial house demolition programme in Middlesbrough has been confirmed by the Government.

The money will also enable a start to be made on other housing market renewal schemes across Teesside.

Eventually the programme could see 8,000 homes pulled down across the region and 6,500 new homes built over the next decade.

Plans have already been made for 1,500 homes in Middlesbrough’s Gresham and Middlehaven wards to be demolished.

Redcar & Cleveland Council is planning a major scheme to breathe new life into South Bank and the cash will also help Stockton Council continue its major regeneration work in the Parkfield area.

New homes will also be built and improvements carried out to homes and streets in remaining older housing areas in Teesside.

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The £18.25m is on top of £13m agreed in January from the Regional Housing Board’s Single Housing Investment Pot. TVL chairman Neil Etherington said: “The current allocation will get a range of important schemes off the ground but there will be a need for ongoing funding to complete them.”

Each of the four councils will be told in the coming weeks how much they will get.

TVL director Jim Johnsone said: “This critically important first allocation of cash will enable TVL and its partner authorities to progress their ambitious transformational programme, which will eventually see the clearance of almost 8,000 properties, and their replacement with 6,500 new homes by 2016.

“During the same period it is envisaged around 13,500 homes next to clearance areas will be improved.”

Dave Budd, Middlesbrough Council’s Executive councillor for regeneration, said: “We can now plan with some certainty and confidence for better quality housing - and a better quality of life for thousands of people.”

Redcar and Cleveland’s Cabinet member for Neighbourhood Renewal, Councillor Chris Abbott, said: “The funding will help us start to deliver a new South Bank that people can be proud to live in.”

South Bank Housing Strategy Steering Group chairman and local councillor Ian Jeffrey, said: “We are looking forward to an early start to the work so people can feel progress is being made.”

The Renewal Plan in South Bank involves the acquisition and clearance of nearly 362 properties - 205 of these over the next two years, of which 142 are already empty.

Sharon Lonergan, Stockton Council’s housing regeneration manager, said: “This is fantastic news for the people of Parkfield. This money will kick-start Phase II and allow us to start relocating existing residents.

“Overall there will be more than £30m in investment in Parkfield.”

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SCHEDULE OF WORKS CHECKLIST - EXTERNAL RENOVATIONS PROBLEM

SOLUTION

COST

Roof repairs Chminey Removal, repair, alteration Painting Windows Guttering Repointing or Rendering Extension or building works Demolition Skip hire Other

GARDEN Hard landscaping (new fencing, patio or decking) Soft landscaping (new lawn, shrubs, plants, trees) Structures (shed, garage, outbuildings) Other

ENTRANCE Front door Door surrounds Porch Flooring Paintwork Staircase Other

TOOLS AND EQUIPMENT Hire Purchase

LABOUR COSTS INCLUDING VAT CONTINGENCY FUND (10%) TOTAL COST

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SCHEDULE OF WORKS CHECKLIST - INTERNAL RENOVATIONS FLOORING (e.g. concrete, wood, carpeting)

WALLS & CEILINGS (e.g. plastering, hacking off, replastering)

DECORATION (e.g. walls, ceiling, woodwork)

TILING (e.g. splashbacks, flooring, fireplace surrounds)

WINDOWS (e.g. replace, repair, install new roof lights, check locks)

ELECTRICS (e.g. run cabling, light fittings, switches, sockets, phone points)

Bedroom 1

Bedroom 2

Bedroom 3

Bedroom 4

Bathroom 1

Bathroom 2

Study

Loo

Utility Room

Kitchen

Dining Room

Reception Room 1

Reception Room 2

Hallways & Landing

Other

CONTINGENCY FUND (10%)

TOTAL COST

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PLUMBING (e.g. radiators, boiler, bathroom, kitchen)

JOINERY (e.g. general & detailed work: hanging doors, skirting, cupboards, shelving)

BATHROOM SUITE (e.g. bath, basin, loo, shower, taps and wastes)

NEW KITCHEN (e.g. works surfaces, sinks, taps)

WHITE GOODS (e.g. cooker, washing machine, dishwasher, fridge freezer, microwave)

GENERAL MAJOR WORKS (e.g. demolition of internal walls, installation of new internal walls, new building work such as extensions and loft conversions, new floors laid)

Bedroom 1

Bedroom 2

Bedroom 3

Bedroom 4

Bathroom 1

Bathroom 2

Study

Loo

Utility Room

Kitchen

Dining Room

Reception Room 1

Reception Room 2

Hallways & Landing

Other

CONTINGENCY FUND (10%)

TOTAL COST

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ITP

BUILDING CONTRACT (MINOR WORKS) Name of Builder: Address:

Telephone:

Postcode:

Email:

Name of Client: Address:

Telephone:

Postcode:

Email:

Description of the Work:

The work will take approximately

days to complete

Quotation: VAT: Total Price: Signature (Builder)

Printed:

Signature (Client)

Printed:

Date:

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ITP ITP PROPERTIES Mr Daniel Scott Pinkney 53 Gunnergate Lane Marton-in-Cleveland Middlesbrough Cleveland TS8 9AZ

Telephone: 01642 519268 Mobile: 0797 161 2964 Email: dan.pinkney@itp-properties.eu.com