Date Published 11 January 2016
In this article we will share with you, what you should be aiming for as your rental yield and how the current market compares.
Well with asking prices in London soaring every day, in order to receive a good return on your buy to let property investment, the achievable rent of the property needs to correspond with the particular area and this needs to level up with the current market prices. Let's have an inspection, on a selection of streets, where we shall analyse the asking prices, rental values as well as the potential rental yields, in which the former two calculate towards. For the purposes of a fair and honest representation, we will average out my findings in order to express the status of the entire area, not just the most or least financially rewarding.
1 bedroom flats
Welbeck Street (W1G): Average Property Value - £1,362,750 Average Rental Value (pcm) - £3,787 Potential Rental Yield - 3.33%
Paddington Street (W1U): Average Property Value - £1,021,166 Average Rental Value (pcm) - £2,828 Potential Rental Yield - 3.32%
Nutford Place (W1H): Average Property Value - £700,000 Average Rental Value (pcm) - £2,208 Potential Rental Yield - 3.78%
2 bedroom flats
Devonshire Street (W1G): Average Property Value - £1,004,090 Average Rental Value (pcm) - £2,818 Potential Rental Yield - 3.36%
Seymour Place (W1H): Average Property Value - £1,591,250 Average Rental Value (pcm) - £4,375 Potential Rental Yield - 3.29%
Wimpole Street (W1G): Average Property Value - £1,858,583 Average Rental Value (pcm) - £5,326 Potential Rental Yield - 3.43%
3 bedroom flats
Blandford Street (W1U): Average Property Value - £2,141,545 Average Rental Value (pcm) - £6,700 Potential Rental Yield - 3.75%
Dorset Street (W1U): Average Property Value - £1,934,400 Average Rental Value (pcm) - £5,544 Potential Rental Yield - 3.43%
Homer Street (W1H): Average Property Value - £1,585,000 Average Rental Value (pcm) - £5,600 Potential Rental Yield - 4.23%
From our findings, we can see that the total average rental yield to be found from our nine guinea-pig streets comes to an estimated 3.54%, which varies slightly if we distinguish 1, 2 and 3 bedroom properties as their own categories. For 1 bedroom properties our rental yield average comes to 3.47%, for 2 bedroom properties this is 3.36% and finally for 3 bedroom flats, our average rental yield approximates at 3.80%. As a result, we see that 3 bedroom properties are shown to be the most financially rewarding, in terms of their rental yield, and on average, generally prove to be the best long term investments for Buy to let.
Principally, you can use these average figures as a guide to understanding what sort of rental yield you could potentially be achieving in the Marylebone property market. If properties circulate around these estimated figures, you are usually acquiring a good market investment; if your calculations produce you better figures, that usually means you are getting very good value for your money. However, there are many different conditions you must also satisfy and take into consideration, such as the square footage of the property as well as your budget, when it comes to asking prices. If a property possesses a particularly good asking price or one low enough to suit your budget and the square footage of a property matches your needs, we do advise that some leverage should always be applied to prospective rental yields.
If you require any further advice, regarding rental yields or need any clarification, regarding the Marylebone property market as a whole, my door is always open to anyone seeking guidance. Please contact us by phone or email, should this be the case.