Does the bigger property investment scene in Marylebone display good buy-to-let potential? Time to check out how much rental income a 3 or 4 bedroom property could get you in the current market!

Date Published 29 August 2016

Well last week we discussed the buy-to-let investment scene, with particular focus on the rental side and in terms of 1 and 2 bedroom properties. I am pleased to say that I received quite a lot of positive feedback, where a series of individuals found the article to be very stimulating, and while some suggested a few details could be added to enhance the content, others voiced that the points raised were very informative and that it helped with their judgements. One particular investor, who is a close follower of my blog and is frequently in touch with me, asked whether I could produce a similar piece of work, but shift my direction towards bigger property investment prospects – notably 3 and 4 bedroom homes. He wanted to understand what the most current status is with the Marylebone property market, and how many 3 along with 4 bedroom properties are currently listed for rent, as well as how much they are expected ‘to let' for. Another question he raised was which area would provide him with the most buy-to-let potential, where in particular he wanted to understand whether W1H, W1G, W1U or NW1 would generate the highest rental income. Although I highlighted W1G as a particularly investable area for 1 and 2 bedroom properties last week, this investor also hinted to me that he was very curious whether W1G would withstand its neighbouring competition once again, or perhaps a different area may provide a better investment outlook for 3 and 4 bedroom residences. Well in terms of quantity, I can inform you that NW1 and W1H currently provide us with the greatest number of both 3 and 4 bedroom properties being listed on the market, whilst W1U has a slighter shorter choice of residences to choose from, and W1G finds itself with the least amount of properties currently available ‘for let'. This shortage of homes to rent with the larger properties in Marylebone is a common feature, and one that is statistically typical in Central London as a whole – with no exception to Marylebone as well. To explain, readings show us that currently in Marylebone 40% of the properties available to rent are 2 bedrooms and 30% are 1 bedrooms; conversely there is a significantly lower amount of 3 bedroom properties (14%), and an even smaller proportion of the rental market is attributed to 4 bedroom residences – a diminutive 4%! But as we all know, very rarely does quantity ever define quality, and although there may be a shortage of 3 and 4 bedroom properties on the rental market, it doesn't mean that your bigger property investment couldn't be a buy-to-let gold mine – and that's what I'm aiming to help you with in this article! So returning to the task at hand, I will be inspecting a wide range of 3 and 4 bedroom properties which are currently listed on the Marylebone rental market – gathered up from all 4 of our main Marylebone sectors: W1H, W1U, W1G and NW1. Proceeding along, I shall bring these 3 and 4 bedroom properties together, drawing up a current rental range from the cheapest to the most expensive rental prices displayed in each area. I will then continue by bringing to light the average rental value (pcm) of each area, as well as the expected rental income (yearly) that this type of investment selection would bring about.

Marylebone – W1H:

3 bedroom properties for rent: Current Rental Range (pcm): (£3,029 - £13,683) – Average Rental Value: £6,474 (pcm) - Expected Annual Rental Income: £77,688
4 bedroom properties for rent: Current Rental Range (pcm): (£3,575 - £15,117) – Average Rental Value: £7,193 (pcm) - Expected Annual Rental Income: £86,316

Marylebone – W1U:

3 bedroom properties for rent: Current Rental Range (pcm): (£3,033 - £11,833) – Average Rental Value: £5,525 (pcm) - Expected Annual Rental Income: £66,300
4 bedroom properties for rent: Current Rental Range (pcm): (£4,225 - £13,783) – Average Rental Value: £6,532 (pcm) - Expected Annual Rental Income: £78,384

Marylebone – NW1:

3 bedroom properties for rent: Current Rental Range (pcm): (£2,275 - £10,833) – Average Rental Value: £5,028 (pcm) - Expected Annual Rental Income: £60,336
4 bedroom properties for rent: Current Rental Range (pcm): (£2,925 - £12,783) – Average Rental Value: £6,051 (pcm) - Expected Annual Rental Income: £72,612

Marylebone – W1G:

3 bedroom properties for rent: Current Rental Range (pcm): (£3,142 - £11,917) – Average Rental Value: £6,084 (pcm) - Expected Annual Rental Income: £73,008
4 bedroom properties for rent: Current Rental Range (pcm): (£3,896 - £9,533) – Average Rental Value: £6,157 (pcm) - Expected Annual Rental Income: £73,884

Examining these readings in greater depth, you will notice that although the larger property rental scene doesn't contain as wide a selection of properties available, not just to gather data from - but also reflecting a general shortage in the market, it nonetheless still possesses a diverse series of opportunities. To explain, comparable to our findings with the 1 and 2 bedroom rental market last week, properties vary considerably in price between our different Marylebone areas, and actually continue this trend internally, where rental prices can stretch by great margins even in the same perimeter; interestingly there is actually an even wider gap in pricing than with last week's smaller properties. The differences surrounding the inconsistent rental pricing are due very much to alternating features such as: the size of the property, the housing development that it's encompassed within, the design of the internal area, and even how recently it's last refurbishment was carried out. Our results express that rental values across our 4 Marylebone perimeters extend up to an eye-watering £11,408 (pcm) with respect to 3 bedroom properties – from the homes with the lowest rental capacities to others which expect to earn significantly more; this dissimilitude in rental price is even greater with 4 bedroom homes, with prices varying up to a whopping £12,192 (pcm). To discuss each Marylebone sector's specific rental range, I can inform you that the W1H postcode in fact features the greatest earning properties currently on the rental market for both 3 and 4 bedrooms – which was particularly interesting for not only my client, but also surprised me for it meant that W1G prices are not as dominant within the larger property investment scene as it was for 1 and 2 bedroom residences. Discussing W1H, 3 bedroom rental prices reached up to £13,683 (pcm) and 4 bedroom rental values extended even further to £15,117 (pcm). Conversely NW1 outlined its currently ‘for let' 3 bedroom properties as the lowest earners on the market (reaching a maximum of £10,833 (pcm), whereas the prestigious W1G area actually provided us with the least rental capabilities for 4 bedroom properties – with the most expensive homes halting at £9,533 (pcm). In terms of average rental values, if we look at the Marylebone rental market is its entirety – combining all our 4 postcodes, we can see that it has a very strong median figure of £5,777.75 (pcm) for 3 bedroom properties, and the average rental value is naturally higher at £6,483.25 (pcm) for the bigger 4 bedroom properties. Nonetheless, if we pinpoint a specific Marylebone perimeter with particularly investable results, W1H remains our chief hotspot; the area currently expects an average rental figure of £6,474 (pcm) for 3 bedroom homes, and £7,193 (pcm) for residences encompassing 4 bedrooms. On the other side of the spectrum, the current market shows us that NW1 properties expect to earn the least amount of monthly income for 3 bedrooms, and W1G in fact displays the lowest rental potential at present for 4 bedroom abodes. Finally, checking out the predicted rental incomes (yearly) of all our selected areas, W1H once again tops the financial charts with an average, annual rental taking of £77,688 for 3 bedroom homes - £4,680 (pcm) more revenue than W1G which also perform admirably in this department and comes in second place. Regarding 4 bedroom properties, the larger property investment bloomers W1H strike again, with yearly accounts reaching £86,316 on average; but on this occasion W1G lands in second last place (after NW1 which achieves the lowest investment readings), and W1U arrive as solid runners up with a median expected income of £78,384 per year.

Despite these general financial predictions and reports, I would like to add that great investment opportunities can be found across all our 4 Marylebone perimeters and each case should be dealt with on an individual basis. If we get too statistically-hardened and follow average figures too closely, you may actually find yourself losing out on potentially brighter prospects elsewhere; the beauty of property investment is trying to locate a bargain which goes unnoticed by others and one which you can take advantage of – profiting financially as a result!

In case you'd like to research the Marylebone rental scene even further, or if you have any specific 3 or 4 bedroom properties that you'd like a second opinion on, then please get in touch with me and I'll be happy to discuss any queries you may have. The larger property rental market covers a wide selection of properties, ranging greatly in terms of square footage and the desirability of particular Marylebone perimeters. It is thus of paramount importance that if you're looking ‘to let' out your property, that you have the correct information at your disposal, so that you can maximise your investment's potential.