Fitzrovia Buy To let – Bedrooms?

Last week, a landlord from Fitzrovia emailed me to ask, after reading the Fitzrovia Property Blog, if he should extend his terraced house making an extra bedroom in the loft. He had a builder friend who owed him a favour, and thought a good way would be get an ‘inexpensive’ extension.

Having more useable space is generally thought to be consistent with better quality accommodation and homeowners and tenants are prepared to pay for it. If you added a bedroom to a two bed terraced to make a three bed terraced, it will add 10% to the value of the property.  Turn a three bed terraced into a four bed terraced and 9% will be added to the value. Looking at semi detached properties, and turn a two into a three bed and 12% will be added to the value, whilst making a three bed semi into four bed will add 9% in value.

However, before you rush off to the planning department there are some important considerations, whether you are a homeowner or landlord.  What would be the cost of making that extra bedroom? The average value of a terraced house in Fitzrovia is currently £2,195,600 whilst the average value of a semi detached house is £1,874,200, meaning to make money the cost of the extension would need to be less than £208,582 on the terraced property and £196,791 on the semi detached house. Talking to a number of trades people in the City, most are booking up into the New Year. Maybe the builder was just thinking of a bit of pointing work on the chimney but no matter how good a friend he was, there isn’t much profit in these figures if you take into the account the lost rent during the building works!

Well, that got me thinking about how bedrooms affected rental prices and rent-ability as well.   Interestingly below, you will see that whilst bedrooms do have an effect on the rent that can be achieved and the rent-ability of the property – the difference does not warrant the expense, hassle and trouble of extending.

·       10.3% of the one bed properties on the market to rent in Fitzrovia have a tenant with an average rent of £3,593 per month

·       3% of the two bed properties on the market to rent in Fitzrovia have a tenant with an average rent of £4,995 per month

·       8.9% of the three bed properties on the market to rent in Fitzrovia have a tenant with an average rent of £9,351 per month

·       14.2% of the four bed properties on the market to rent in Fitzrovia have a tenant with an average rent of £11,944 per month

Now, if you want to increase the value of your property, be you a Fitzrovia landlord or homeowner, there are things that cost a lot less than building extra bedrooms. Spruce up the exterior, emulsion all the rooms, install fresh carpets and curtains. For homeowners, a matter of a few hundred pounds will add thousands whilst for landlords, these things can add an extra 10% to the rent that you can achieve. For more advice and opinion on the Fitzrovia Property Market, visit the Fitzrovia Property blog: fitzroviapropertyblog.com

5% Return on this studio in Bloomsbury WC1

http://www.rightmove.co.uk/property-for-sale/property-48395194.html

I know, I know, this studio isn't the most attractive of properties, but it's not too bad inside and the building does benefit from a 24 hour porter. Russell Court, Woburn Place is a popular 1930s mansion block, close to Universities so perfect for the student crowd or perhaps a young professional looking for their first rental property.

This particular property has come to the market with an asking price of £310,000, which seems to me to be fairly reasonable. One thing you might want to do at some point is to upgrade the kitchen and bathroom as they are original and looking quite dated now. 

We have rented a couple of similar properties in this block and would expect you would be able to achieve around £300pw. Doing my calculations, you are looking at a potential yield of 5%, before taking into account any service charges that may be due. Always best to do your homework before taking the plunge

These high yield'ers don't hang around for long as there are a lot of potential landlords looking to buy and as soon as these tasty ones come to market, they get snapped up very quickly. So don’t hang around!

Investing in property, can be scary, but as long as you are well informed, it shouldn't be a disaster. I want to make sure that anybody looking to jump into being a landlord, does it the right way. I will always give my honest opinions on what does and doesn't work well. Together we can get it right for you. Why not pop in for a cuppa when you are next in tow, my office is on Cleveland Street. Give me the heads up and I'll make sure the kettles boiled ready!

Bloomsbury apartment with a 5% potential yield!

http://www.rightmove.co.uk/property-for-sale/property-47730694.html

Hi property hunters. As you know I spend a lot of time looking through Rightmove, (probably too much time) trying to pick out the best options for buy to let properties. The reason I do this is because it can be a bit of a minefield out there and I want to make sure that our landlords going into buy to let, are doing it with their eyes wide open.

Todays property is a lovely little studio in Russell Court, Woburn Place WC1. These properties are perfect for the student market or young professional and this one is in great condition. We have rented a couple of similar properties in this block and would expect you would be able to achieve around £310pw for one in this condition. With an asking price of  £315,000 this provides a potential return of over 5% much better than what the banks are offering!

This property will not be around for long though, so get you down to the agents now to book a viewing.

This is a nice easy renter, no hassle, no fuss & when you use a competent agent to find you a tenant, a nice easy ride.

If you would like any advice on buying to let, feel free to give me a call on 020 7255 9966

Fitzrovia Buy To Let – Demand and Supply

Following on from my recent article about the state of the Fitzrovia property market and in particular what had happened to the rents Fitzrovia tenants have had to pay since the Credit Crunch, if you recall, I said rents in Fitzrovia are 21.49% higher than they were in 2008. A Fitzrovia landlord has since rung me after reading the Fitzrovia Property Blog, wanting to know more of the story of what was happening to current rents in the area. The reason he asked was that his current agent hadn’t increased his rent for a number of years and was concerned if he was getting the best return from his buy to let investment.

The Fitzrovia rental market is all about supply and demand (isn’t it so in all parts of the economy?). On the supply side, 98 rental properties have come up for let in the last 31 days in Fitzrovia. It sounds a lot until you consider there are 2,174 rental properties in Fitzrovia, that means only 4.5% of the rental stock of properties in Fitzrovia are coming onto the market each month (it is normally around 5%).  One reason for this lack of new rental properties coming on the market is the fact that tenants seem to be staying in properties longer.

With this lack of supply, newer tenants have to pay more to secure the property they want. And this is the crux of the matter ...properties they want. Older properties in Fitzrovia, that haven’t been maintained, still retain their wood chip wallpaper from the 1970’s and thread bare carpets have seen their rents drop. Tenants want either modern properties with all the mod cons or older style properties that have been presented to an exceptional standard – and they are prepared to pay for the privilege.

Rents for top quality properties in Fitzrovia have risen by 2.3% in the last month. Any properties, old or modern, put on the market in good or excellent condition will rent in a matter of days.  

Interestingly, looking at Fitzrovia property values, the Land Registry have just released their latest set of data on property values. Throughout April 2015 (the latest set of data), property values fell in Fitzrovia by 0.2%, however, they are still 10.2% higher than they were a year ago.  When one looks at the regional picture, the Greater London average property values rose by 2.3% in the last month. The difference doesn’t concern me, as the regional and local property values always even themselves out over the months. 

Looking forward, after considering all the statistics and talking to other property professionals, I expect property values in Fitzrovia to rise by 3% to 5% over the coming 12 months, following the Conservative victory.  In a forthcoming article, I will discuss how the number of properties changing hands each month has dropped considerably in the last 10 to 15 years in the area. 

...And so back to our landlord. Each property is unique and so as his tenancy agreement allows him to inspect the property with notice to the tenant, we will be visiting the property next week.  For more in depth thoughts and opinions like this on the Fitzrovia Property market ...visit the Fitzrovia Property Blog fitzroviapropertyblog.com