Properties in the West vs. the East of the Marylebone border, does it make a difference where you decide to invest?

Date Published 21 March 2016

Last week I received a call from a very knowledgeable gentleman, who owns a number of properties in the Marylebone area; he provided me with some great feedback and suggested how Marylebone varies incredibly, where different streets from opposite sides of the area can differ in their prices as well as their rental potential. In addition, we also spoke about how the desirability of specific streets can have a huge effect on the investment capabilities of properties; even when these properties could be very similar in terms of their bedroom capacities, square footage as well as interior designs. We certainly agreed with each other on this matter and subsequently I decided to investigate further, checking out just how much Buy-to-let difference there is within Marylebone. To direct this research I chose to focus my attention on 1 and 2 bedroom properties on the West side - bordering Edgware Road, in comparison to properties of the same type on the East end of the Marylebone perimeter, before approaching Fitzrovia. The East side of Marylebone enjoys an easy opening towards the beautiful Regent`s Park, but also heavily feature`s the area`s hospital district - with Harley Street, King Edward VII`s Hospital and University College Hospital all residing within the East side`s perimeter. In comparison, the West side of Marylebone incorporates the lively atmosphere that nearby Edgware Road plus Marble Arch bring forth and is home to key sites such as the Marylebone tube and rail stations, the classy green sections of Bryanston Square along with Montagu Square and an endless array of charming restaurants plus independent stores. In order to achieve a thorough examination, I analysed 1 and 2 bedroom properties along 4 different streets in total (2 streets from either end of Marylebone) particularly looking at the average property valuations as well as the prospective rental yields that can be expected.
Analysis of Properties on the West Side of Marylebone

Seymour Street (W1H):
1 bedroom flats: Average Property Value: £617,265 - Average Rental Value: £2,145 (pcm) - Predicted Rental Yield= 4.17%
2 bedroom flats: Average Property Value: £1,076,068 - Average Rental Value: £3,415 (pcm) - Predicted Rental Yield= 3.80%

Daventry Street (NW1):
1 bedroom flats: Average Property Value: £553,284 - Average Rental Value: £2,028 (pcm) - Predicted Rental Yield= 4.39%
2 bedroom flats: Average Property Value: £846,663 - Average Rental Value: £3,100 (pcm) - Predicted Rental Yield= 4.39%

Analysis of Properties on the East Side of Marylebone

Hallam Street (W1W):
1 bedroom flats: Average Property Value: £768,000 - Average Rental Value: £2,716 (pcm) - Predicted Rental Yield= 4.24%
2 bedroom flats: Average Property Value: £1,282,723 - Average Rental Value: £4,494 (pcm) - Predicted Rental Yield= 4.20%

Harley Street (W1G):
1 bedroom flats: Average Property Value: £978,365 - Average Rental Value: £2,989 (pcm) - Predicted Rental Yield= 3.66%
2 bedroom flats: Average Property Value: £1,549,483 - Average Rental Value: £4,547 (pcm) - Predicted Rental Yield= 3.52%

From these figures, we can clearly see that properties on the East side of Marylebone command a much heftier price tag on average than properties on the West Side of the Marylebone perimeter. Our representative East Marylebone streets: Harley Street (W1G) & Hallam Street (W1W) form an average valuation of £873,182 for 1 bedroom properties, and for 2 bedroom properties this rises much higher to £1,416,103. In comparison the East side of Marylebone, using our 2 example streets Daventry Street (NW1) and Seymour Street (W1H), the average worth of 1 bedroom flats comes to £585,274 and as for 2 bedroom properties, the average price combining these 2 streets calculates to £961,365. Resultantly, we can see that both 1 and 2 bedroom properties are much cheaper on the West side of Marylebone on average, and certainly with the above streets we have used; 1 bedroom flats were £287,908 cheaper and 2 bedroom flats are shown to be £454,738 less on average in these instances. When we reflect this upon the whole market, we see that much more value for money can be gained with properties from the West side of Marylebone, and that streets which come within the East side of Marylebone, especially in the more prestigious streets, require a much more premium price to be paid. In addition, when we look upon the Buy-to-let aspects, we see that our 2 streets within the East section of Marylebone bring about a return of 3.95% on average for 1 bedroom flats and 3.86% for 2 bedroom flats. Although these are very good returns and expresses great investment potential, we see that mathematically the West side of Marylebone once again offers a better all round investment. Our streets here show a prospective 4.28% yield expected on average for 1 bedroom flats and an estimated 4.09% for 2 bedroom flats. However, this certainly does not tell the whole story or paint us the whole picture if you prefer, as irrespective of the figures behind these results, they cannot be achieved without tenants to occupy the investment after you purchase it. To expand, the prestige of streets like Harley Street and the facilities as well as services available here, such as hospitals and educational establishments in the East side of Marylebone, create a much higher demand for properties – hence this being reflected in the higher property prices. But also this means more tenants will be lured into renting in this area, which means that it is likely that there will be more competition for properties. Subsequently, landlords can be much more assured of having a tenant to occupy their property in the East side of Marylebone; a tenantless property or a property which takes longer to attract potential tenants is much worse than a property in which a premium price had been paid to acquire it. Many factors come into play when investing in Marylebone, make sure the property you choose to invest in doesn`t merely satisfy the figures, but also that it suits the real-time possibilities involved with Buy-to-let properties – as well as the demand for your particular investment.

If after reading this article, you would like to talk in more depth about either side of Marylebone, the current investment opportunities available or would like an assessment of any streets in particular, please get in touch with me and I will try to arrange this for you!