PropLens · 29-31 Fenkle Street, Alnwick NE66 1HW

Offer range · Hybrid (income hold on stabilised multi-let + GDV exit via individual flat sales)

Income hold range

£150,000

£175,000

Lower end · 20%Upper end · 15%

Lender-supported; multi-let stabilised at refurb spend.

GDV exit range

£200,000

£220,000

Lower end · 25%Upper end · 20%

Developer flip, c.12 months. Requires title split / lease-out + lease-up + individual flat sales.

Auction guide £200,000 sits 14% above the upper end of the income lens, and sits 0% below the lower end of the GDV exit lens. The two ranges answer different questions: the income lens is what a long-term lender will support; the GDV exit lens is what's realisable on individual flat sales after title split.

Income basis Income basis: stabilised — Flat A actual tenancy + ERV on the four vacant units (Flats B/C/Blacks + shop + basement). Year 1 effective cash-on-cash will be lower depending on lease-up speed.

£36,860 − £5,529 → NOI £31,500

Offer explorer

Your offer

£175,000

Equity required

£0

Lender lends £169,000 against VP £260,000

Cash-on-cash

DSCR @ 8%

2.33×

Same at any price

Net cash flow

£17,980

NOI − debt service (fixed)

Lender lens · five ratios

DSCR @ 8% rate 2.33× Strong

Stress DSCR @ 10% rate 1.86× Strong

Debt Yield (NOI / Loan) 18.6% Strong

Yield on Cost 0% Viable

Net Initial Yield 0% Viable

65% LTV · 8% IO · 7% costs · NOI £31,500 · VP £260,000 (lender basis)

Thesis

5-unit mixed-use auction lot in central Alnwick: 1 of 5 units tenanted (Flat A, 2-bed) and 4 vacant (Flats B, C, Blacks Building flat, and ground-floor shop with basement). Stabilised NOI £31,500 at 10.75% ARY produces an income-lens VP of £260,000; the residential comparable approach values the 4 flats at £385,000 on £210/sqft NE66 1 sale comparables, taking total comparable GDV to £460,000. Refurb-to-let capex of £100,000 (cosmetic-only scope, listed escalator not applied) sits between purchase and stabilised income; if the GDV exit is targeted, an additional £30,000 of title-split / lease-out costs apply.

Resi share is 54% of total NIA and the resi comparable GDV is 88% above the resi income-lens contribution, so the deal is classified hybrid. The income lens supports £150,000 − £175,000 (lender-supported, multi-let hold). The GDV exit lens supports £200,000 − £220,000 (developer flip, c.12 months, after refurb, title split / lease-out, and a 20-25% profit margin). The auction guide of £200,000 sits above the income lens upper end but within the GDV exit lens, giving the bidder optionality between the two exits.

What's wrong with it

Four of five units vacant: four separate lease-up campaigns with concentrated Year-1 void exposure.
Grade II listed: works requiring LBC carry a +20-30% cost premium and timing uncertainty.
EPC E: MEES upgrade required pre-let in commercial from 2027.

What's right with it

Central Alnwick frontage with no visible vacancy on the immediate parade.
Five-unit lot offers built-in diversification: residential rents service debt while commercial leases up at its own pace.
Resi GDV cross-check shows the 4-flat sale exit is materially above the income-lens valuation, creating optionality.

Risks

Lease-up risk: 4 vacant units in a market-town lettings market take 6-18 months to stabilise.
Listed-building consent risk: any structural / fire / acoustic separation work requires LBC and may be refused or modified.
Auction execution: 28-day completion window restricts due diligence; legal pack must be read pre-bid.

DD gaps

Tenure: stated as "see legal pack". Confirm freehold for title-split angle.
Flat A tenancy: passing rent, lease term, deposit, and any historic arrears.
Building survey: full structural and M&E survey required pre-bid; EPC certificates per unit.

Considerations

Grade II listed status: works will require LBC and a heritage detailing premium.
Basement use: storage/workshop only without significant change-of-use capex; no obvious residential conversion route under listed constraints.
Auction sale: completion typically 28 days from fall of hammer; cash or pre-approved bridge required.

Property & Valuation

Facts, condition, comparables, valuation stack, and purchase-cost schedule for due-diligence reference.

Facts

Address	29-31 Fenkle Street, Alnwick NE66 1HW
Asking	Guide Price £200,000
Property type	Mixed Use (5-unit lot: shop + basement + 4 flats)
Total NIA	3,545 sqft (1,920 resi / 1,625 commercial)
Tenure	See legal pack (DD gap)
Condition (Step 2)	Fair
Listed	Grade II
EPC	E (MEES upgrade required pre-let 2027)
Agent	Auction House North East (sale 3rd June)
Jurisdiction	England & Wales (SDLT)

Photos

Physical assessment

Mid-terrace stone-built Grade II listed building on Fenkle Street in central Alnwick. Original sash windows, slate roof.
Ground-floor retail unit with separate office, store and kitchen; central frontage onto Fenkle Street.
Basement c.92 m² with multiple rooms (kitchen, large workshop 4.9 × 7.0 m, smaller rooms) and separate stair access. Likely workshop or storage given depth and lack of natural light.
Four self-contained flats above (Flat A tenanted, Flats B/C/Blacks vacant). Flat B is 2-bed with ensuite plus family bathroom; Flats C and Blacks are 1-bed.
EPC band E across the building. MEES upgrade required pre-let from 1 April 2027 (commercial) and currently in force for residential AST lettings (minimum E).
Surroundings: Fenkle Street is a secondary retail run in central Alnwick. Independent retail, hospitality and professional services predominate. No visible vacancy on the immediate parade.

Per-unit income

Unit	NIA (sqft)	Status	Annual rent	£/sqft
Flat A (2-bed)	625	Tenanted	£7,200	11.52
Flat B (2-bed)	625	Vacant (ERV)	£7,200	11.52
Flat C (1-bed studio)	345	Vacant (ERV)	£5,700	16.52
Blacks Building Flat	325	Vacant (ERV)	£5,700	17.54
Shop (ground floor)	635	Vacant (ERV)	£7,560	11.91
Basement (storage let)	990	Vacant (ERV)	£3,500	3.54
Gross rent	3,545		£36,860
Landlord costs (15% multi-let)			(£5,529)
NOI (stabilised)			£31,500

Yield selection

Base ARY: Northumberland secondary commercial 8-10% midpoint = 9.0% (PrimeLocation/LoopNet Northumberland yield sample; Ryden 2025 secondary regional). Sub-£500k lot-size adjustment: +175 bps. Final ARY: 10.75% (rounded to nearest 25 bps).

Yield	VP	Δ vs base
9.5%	£330,000	Tighter pricing
10.75% (base)	£295,000	—
12.0%	£265,000	Softer pricing

Valuation stack

Metric	Calculation	Value
VP (MV3, multi-let stabilised)	£31,500 / 10.75% less voids, rent-free, fees, holding	£260,000
T&R	Not applicable (only 1 of 5 units tenanted, dominant value is on the vacant lease-up)	—
Rack Rent	£36,860 / 10.75%	£345,000
Gap (Rack − VP)	Value created by filling voids and achieving market rents	£85,000
MV1 (stabilised)	NOI / ARY	£295,000
180-day restricted-marketing	MV1 × 0.90	£265,000
90-day restricted-marketing	MV1 × 0.80	£235,000
Asking	Auction guide	£200,000

ARY 10.75% = Northumberland secondary commercial 9.0% midpoint + 175 bps lot-size adjustment, rounded. Cross-check: Northumberland average net initial yield 9.08% (PrimeLocation/LoopNet listings sample). VP is the lender basis for non-conventional multi-let income.

Residential GDV cross-check (mixed-use)

Trigger: residential NIA 1,920 sqft / 3,545 sqft = 54% (above 30% threshold). Anchor: £210/sqft, from HouseMetric NE66 1 sector (264 sales, last 24 months, IQR £174-£255/sqft). Mid-range of the postcode-sector IQR.

Unit	NIA (sqft)	£/sqft	Tenancy factor	Unit GDV
Flat A (2-bed)	625	£210	0.85 (tenanted AST)	£111,563
Flat B (2-bed)	625	£210	1.00 (vacant)	£131,250
Flat C (1-bed studio)	345	£210	1.00 (vacant)	£72,450
Blacks Building Flat	325	£210	1.00 (vacant)	£68,250
Total resi GDV				£385,000
Plus commercial value (per §4.4)	Shop + basement at 10.75% less voids/RF/fees			£75,000
Comparable GDV total				£460,000
Income approach (VP, per §4.4)				£260,000
Spread				+77% comparable over income

Income approach: £260,000. Comparable approach (resi-heavy mixed-use): £460,000. Spread reflects the market-town residential sale-comparable premium over commercial rental yield: residential value here is dominated by £/sqft sale comparables, not NOI/ARY. The income approach is what a lender will value against for the long-term loan; the comparable approach is the equity-exit GDV achievable if individual flats are sold post-stabilisation (subject to title split). Both are honest answers to different questions.

Separation cost: realising the comparable GDV requires the 4 flats to be sold individually, which means title split or lease-out. Resi GDV £385,000 is gross of separation costs (£30,000, see §4.7) — net realisable c. £355,000. Default route: lease-out at £5,000/flat plus £10,000 LBC/firewall contingency for listed multi-occupancy.

Acquisition benchmark

Alnwick is not in the indicative benchmark table (table covers Scottish target towns plus headline English commercial markets). Sector comparison: asking £56/sqft for a 5-unit mixed-use lot, in a market town with NE66 1 residential sales averaging £174-£255/sqft on the resi component alone. Mixed-use price/sqft is not directly comparable, but the £56/sqft asking is below typical secondary mixed-use in Northern market towns (£75-£120/sqft).

Purchase costs

Purchase price (upper end)	£175,000
SDLT (non-residential bands)	£500
Legal fees	£4,500
Disbursements	£650
Broker fee (1% of price)	£1,750
Lender arrangement (2% of loan)	£3,380
Lender legal	£2,500
Surveys	£2,000
Subtotal acquisition costs	£15,280
Refurb to let (5 vacant units, breakdown below)	£100,000
Title split / lease-out (4 flats, listed firewall contingency) ^†	£30,000
All-in cost (purchase + acq fees + refurb + separation)	£320,280

Unit	NIA (sqft)	Rate £/sqft	Scope	Escalator	Cost
Flat B (2-bed)	625	£25	Light resi refurb (cosmetic, no LBC)	Market town +12%; listed 0% (cosmetic, no LBC)	£17,500
Flat C (1-bed studio)	345	£25	Light resi refurb (cosmetic, no LBC)	Market town +12%; listed 0% (cosmetic, no LBC)	£9,660
Blacks Building Flat	325	£25	Light resi refurb (cosmetic, no LBC)	Market town +12%; listed 0% (cosmetic, no LBC)	£9,100
Shop (ground floor)	635	£50	Commercial refurb (no signage/structural changes assumed)	Market town +12%; listed 0% (no LBC scope in base refurb)	£35,560
Basement (storage let)	990	£25	Light refurb (storage-let)	Market town +12%	£27,720
Total refurb-to-let					£100,000

Strategy & Appraisal

Value-add angles, holding-structure recommendation, and supporting analyses for the bid thesis.

Value-add angles

1. Hold as 5-unit multi-let (income hold, post lease-up)

Lease up the four vacant units (3 resi + shop + basement at storage rate). Stabilised gross rent £36,860, NOI £31,500, income-lens VP at 10.75% ARY = £260,000. Refurb spend £100,000 required (cosmetic only, listed escalator not applied). Lender funds against VP, not GDV.

Max purchase (income lens): £150,000 − £175,000. Risk: 5 vacant units = 5 separate lease-up campaigns; Year 1 cash-on-cash materially below stabilised. Viability: Strong.

2. Resi GDV exit via individual flat sales (developer flip, c.12mo)

Title-split or long-lease the 4 flats (subject to freehold confirmation and Grade II listed consent for any required fire / acoustic separation). Sell flats individually at NE66 1 £/sqft comparables (£210/sqft anchor). Resi GDV £385,000 + commercial value £75,000 = £460,000. Spread vs income approach: +77%. Separation cost: £30,000 (lease-out + LBC firewall contingency); net realisable GDV c. £430,000.

Max purchase (GDV exit lens, 20-25% profit hurdle): £200,000 − £220,000. Risk: title split needs freehold ownership and listed-building consent if firewall works required; individual sales timing (12-18 months); resi £/sqft slippage. Viability: Moderate (subject to tenure + LBC).

3. Shop + basement to SSAS-eligible commercial sub-portfolio

Once title is split between residential and commercial elements, the shop+basement (1,625 sqft commercial) sits in SSAS at 50% LTV. Residential flats held in SPV. PropCo/OpCo structure if active managed-workspace product is run from the basement.

Max purchase (commercial portion in SSAS): not separately calculated until title split is confirmed achievable. Risk: dependent on title split feasibility in §2 above. Viability: Moderate.

Holding structure

SPV (limited company) holds the building from acquisition. If the title split angle proves viable, transfer the commercial portion (shop + basement) into a SSAS post-completion, with the residential flats remaining in the SPV. The income-hold lens does not require a SSAS structure; SSAS becomes relevant if the commercial element is held long-term as a stand-alone commercial title.

Sources

HouseMetric NE66 1 sector analysis (Alnwick), 264 sales over 24 months — residential £/sqft anchor.
Ryden 90th Scottish Property Review (2025) and Knight Frank Scotland Report (2025) — cross-check for secondary regional yield range.
PrimeLocation/LoopNet Northumberland commercial listings sample — net initial yield benchmark (avg 9.08%).
Rightmove listing 88177935.

Jurisdiction

England & Wales