We have just pulled in a contract to purchase several flats under a freehold title in Marylebone, close to the station.
The purchase price equates to £680 per sq. ft., cheap considering the average price per sq. ft. in this location is £1,100.
This equates to a near 40% discount, unheard of given the location. What’s more is there is no work to be done on the property, it is finished to a high standard and it is freehold. This discount is huge and rarely seen, and it will be compounded for an overseas buyer due to the weakening of sterling.
This is one of the most exciting areas in Central London. The area has previously been seen as the undesirable patch of Edgware Road, due to its many blocks of council houses. Traditionally many blocks of council houses serve to bring the area down, and into disrepute. However given many of the ex- council flats in the area are worth upwards of £500k, this is no longer the case. Ex-council flats make savvy investments, arguably more so than private ones, due to their long leases and low service charges.
Berkley Homes, known for its top end finishes, is planning on bringing 600 units into the area, this will serve in part in raising the area to a higher bar. They purchased a 2.66 acre site in June 2015, the site was used as a car park for several years.
This is probably the last patch of this size anywhere in central London.
The area will be further gentrified. It was always going to be the case, the location has always been strong dues to its close proximity to Baker Street and Marylebone Stations. The dividing line was the A40 which passes through Hanger Lane into central London, which seemed to be the dividing line from the rich side and the poor side, separating the W1 and the NW1.
In the years to come the smart money will be moving into NW1 postcodes, which will experience strong growth in time. This will of course be in the back drop of a slow market in London overall.
This deal would not exist say a year ago, we are in a very different market. This then begs the question, why should one purchase now if there exists an uncertain market and the prices could drop even further?
Firstly, each lump of property is unique; even if prices drop further this one will probably not come up again. Secondly it’s good to get things into perspective, during the credit crunch London property prices dropped about 15%, bear in mind this was one of the worst crisis for decades. We are coming into this deal with a large cushion which will act as an insurance policy in the event of a downturn. Thirdly, the yield on this property is a generous 5%. This may not sound like much, but yields in central London have dampened significantly. So for central London, this is generous.
This deal serves as a litmus test, that the time to buy is now.
We are looking at closing a number of exciting deals before Christmas, actually we have our eyes on a couple of sites in the North West of London, offering a chance for the smaller size investor to purchase.
To furnish or not to furnish, that is the question…
There is no legal definition of furnished, unfurnished or even part-furnished in the UK – these are terms that have come about through industry custom and practice, in reality there is no exact specification or industry standard. What is defined, is that certain furnishings supplied must meet fire safety standards; and it’s in your interest as a landlord to ensure that your furniture and furnishings meet legal requirements.
Landlords and tenants should be aware that what is present and accepted by the tenants at the viewing and on entry is what is to be provided, unless otherwise agreed. If the landlord promises extra items or to carry out extra work, then this must be complied with as it forms the basis of the contract. Failing to provide promised items or services could result in the tenancy agreement being set aside on the grounds of misrepresentation. The inventory records the items provided and their condition; many inventories now provide a photographic record. It is then signed by both parties preventing later disagreements, as the tenancy is then based on those items actually provided and accepted as part of the contract.
A landlord guide:
Unfurnished - many tenants prefer unfurnished (or part furnished), they bring their own furniture and prefer to use their own items, particularly beds. Even unfurnished generally means that carpets, curtains and some white goods (i.e. fridge, cooker) are included.
Part-furnished - here you would expect to see the basics as above, but with perhaps the addition of items such as wardrobes, dining table and chairs etc, but not beds, three-piece suites, TV, dish washers, washing machines etc.
Furnished or Fully Furnished - this is according to the landlord’s discretion, and to some extent by negotiation, as to the standard and amount of furniture required by your target tenant group. In a fully furnished letting you would expect to see similar to the above with the addition of beds, three-piece suites – in fact everything needed to make a comfortable living home: crockery, cutlery, towels, bedding etc.; however even with fully furnished, high end lettings may be subject to negotiation and some of these items might not always be provided. When you have viewings of a property, while still tenanted, point out to the potential new tenants exactly what is to be included and excluded and discuss requirements then. If you are willing to be flexible as a landlord, for example removing and storing unwanted items or adding additional items as required, you will increase your chances of letting quickly, thereby increasing your annual rental income.
Allow our lettings team to guide you through the furnishing regulations and requirements; we can arrange to have apartments furnished or even unfurnished in a matter of days.
