A Few Words
About Us
Welcome
A Few Words About Us
MAJOR GROUP DEVELOPMENTS are a UK based property development and investment company established in 2018. We purchase land and properties, creating high quality rooms, flats and houses across the UK. Acquiring property where there is value to be created through the development and refurbishment. We select our projects knowing that they work within our margins and project manage through to completion. Our fundamental aim is to build our rental portfolio, adding value to the assets in the short term and holding them for the long term. Our strategy moving forwards is to work with like minded individuals who want to increase their levels of wealth and financial freedom through investing in property.
Why do we invest in property?
We have been personally investing and developing property for over a decade. Like many investors, we started off with a limited amount of money and knowledge but with the confidence that property prices increase over time. We soon realised that property is an inflation beating asset class which doubles in value every 8 to 10 years, on average in the UK. We also understood that with the power of leverage (using the bank’s money) and adding value, through developing and renovating properties, we could increase our equity and benefit from all the capital growth with only a 25% deposit, which meant greater returns on our investments.
On our initial projects we stuck to our strengths which at the time was knowledge of our local market and the ability to be hands on with renovations which enabled us to keep build costs down.
Even before educating ourselves in property we have been big believers in RESEARCH, RESEARCH, RESEARCH. We always invested with the basic principles and found areas and properties with:
- Good fundamentals.
- Good capital growth potential.
- Good rental yield and high tenant demand.
- Development potential to add value.
All of the above are principles we still follow today. They have enabled us to add value and recycle our investment funds and therefore increase our portfolios.
However, property investment has evolved since we first began investing and changes in legislation, planning and the new taxing laws surrounding property (section 24) have meant that we have needed to educate ourselves and evolve with the changes.
In 2018 we set up the company and have built a team of people to maximise our success from property sources, solicitors, brokers, financial advisors, in-house property management facility, architects, planning consultants and contractors. This network makes finding, purchasing and managing properties much more time and cost efficient.
Knowledge of the UK property cycle combined with the understanding that different areas go through this cycle at different speeds, allows us to make more informed decisions. We can choose which areas to invest in and which investment strategy to use during different stages of the cycle, to maximise the return on investments.
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Why should you invest in property?
Success isn’t often down to luck. It’s about understanding what you want to achieve, how you’re going to achieve it and utilising the many things that can help you get there. Below are the key concepts that every property investor needs to understand to achieve success.
INFLATION
As an example if you have £100,000 in a savings account that pays a 1% interest rate. After a year, you will have £101,000 in your account. But if the rate of inflation is running at 2%, you would need £102,000 to have the same buying power that you started with.
You’ve gained a thousand pounds but lost buying power. Any time your savings don’t grow at the same rate as inflation, you will effectively lose money.
However, inflation can be a positive when it comes to property investment because of leverage. Your leveraged debt (mortgage debt) is eroded over time by inflation.
For example, if you borrow £100,000 and you get an interest only mortgage, you’ll still owe £100,000 in 20 years’ time. But, because of inflation, that figure will be worth less by the end of the 20 years. In real terms that debt is now worth £67,000 today.
Also because rental prices tend to rise in line with inflation, this means that your income from rent will not be affected by inflation.
Leverage
Leverage is one of the most powerful tools in property investment. By using leverage (a mortgage) you can make your money go further and produce higher returns.
For example if you have £100,000 and you use that money to invest in property you could buy one house worth £100,000 outright or use leverage and buy four properties worth £100,000 each, putting a 25% deposit down on each property (4 x £25,000). Let’s say each property rents for £650 per month and the interest only mortgage cost is £350 per month. Owning a property outright would mean no monthly mortgage payments, however it would produce a single stream of income of £650 per month. Owning four properties using leverage will mean you have four interest only mortgages (4 x £350 = £1400) but four streams of income (4 x £650 =£2600) equating to £1200 profit per month.
However, leverage has an even bigger impact on wealth creation when it comes to capital growth. If we use the figures above and estimate that houses prices increase by a conservative 3% per year, in 10 years’ time each house would be worth around £135,000. That’s a profit of £35,000 without leverage but an impressive £140,000 if purchased using leverage which is a massive difference in ROI.
Why does property go up in value?
Most people know that property prices tend to increase, but the amount they go up each year differs. This is where the 18 year property cycle comes in, whereby house prices have followed the same economic cycles for over 200 years. Each new cycle starts at a higher point than where the last cycle began. Understanding why property prices go up in value shows you why we have confidence in property investing and allows you to be a smarter investor.
There are multiple economic factors which cause property prices to follow a cycle such as the availability of credit and public sentiment. However, the biggest driving force in raising property prices is supply and demand. The amount of land, or supply, available in the UK is fixed, due to planning restrictions and available space to build. The demand for more homes is high and compounds every year, with a persistent shortage of housing. Every year, house builders fall short of the necessary quota and are unable to build the required number of houses to meet the demand. This lack of supply and high demand leads to an increase in house prices.
Different investment options within property
Another reason to invest in property is its versatility and the diversity of investments that you can make. Depending on your financial goals you can select the right type of properties to invest in.
- Looking for monthly cash flow from property then high yielding strategies such as Houses of Multiple Occupation (HMO’s) or Serviced Accommodation (SA) give a higher monthly return then normal single lets.
- Looking for a one off lump sum then land developments, commercial to residential conversions and renovating properties to flip can achieve a large lump sum profit.
- Investing for the long term and want to build a portfolio of properties to bring in a passive monthly income now and build wealth in the future, through capital growth then recycling your investment by adding value and refinancing Buy to Let (BTL) properties can achieve this goal.
MattHew
Game
Founder
Experienced in the building trade, Matthew runs a successful plumbing and heating company and has extensive experience in investing, renovating and managing property. As Director of Major Group Developments Ltd. Matthew takes a lead role in the onsite project management. He excels when comes to creative solutions for the planning and renovation process in each investment property.
John
Bradley
Founder
A BSc with QTS graduate from Brighton University, John is a Teacher, Plasterer and has over a decade of experience in investing, renovating and managing property. As Director of Major Group Developments Ltd. John spearheads the research, off-site project management, marketing and operational functions of the business. He takes the lead role in the organisation of each project.
want to find out more?
If you are interested in investing in property and want to hear more about how property can offer you great returns on your investment, then we would love to hear from you.