Date Published 18 April 2016
Recently we've spent a lot of time discussing Marylebone and the property giants that both dominate and support it, but after a very promising conversation with a new up-and-coming buyer wishing to enter the Central London property scene, a new question has been posed to me: why should we be investing in Marylebone and not in another nearby, bordering district? The area that kept on arising in our very intriguing discussion was nearby Fitztrovia, which arguably most closely matches Marylebone in property prices, rental values as well as being the most subtlety attached perimeter to Marylebone. What I mean by this is that in recent times, there has been much debate on where Marylebone ends (and should end) to the East and where Fitzrovia begins; a meeting was called in as close as 2013-2014 to discuss the boundaries between Marylebone and the West of Fitzrovia with a Fitzrovia neighbourhood association clarifying the historical, established border. This was deemed to be settled on Great Portland Street, which is notably the easiest way of distinguishing the two areas, with Weymouth Street and New Cavendish Street particularly indicating the most Easterly parts of Marylebone; their endings met by the vertically aligned Great Portland Street. So, as asked by this knowledgeable potential investor, what investment differences does Marylebone possess to an area so closely situated to its borders as Fitzrovia? Well in order to clearly and thoroughly investigate this for him, I chose to compare 6 streets, 3 from each area, where I compared their investment capacities as well as capabilities. I used 1 and 2 bedroom properties as my examples, which I will use to portray the average prices that these various properties settle upon as well as the streets in which they are situated on. I will also express the average rental values of the streets in both these areas, the resultant rental yields that can be generated from a buy-to-let investment, as well as the capital growth of each chosen street for the last 10 years.
Property Investment in Fitzrovia:
Cleveland Street (W1T)
1 bedroom flats: Average Property Value: £565,785- Average rental Value: £2,191 (pcm) – Predicted Rental Yield= 4.64% - Average Purchase Price in 2006: £256,788 - Capital Growth over the last 10 years (2006-2016) =79%
2 bedroom flats: Average Property Value: £807,642 - Average Rental Value: £3,137 (pcm) – Predicted Rental Yield= 4.66% - Average Purchase Price in 2006: £348,450 - Capital Growth over the last 10 years (2006-2016) = 84%
Great Titchfield Street (W1W)
1 bedroom flats: Average Property Value: £656,428 - Average rental Value: £2,550 (pcm) – Predicted Rental Yield= 4.66% - Average Purchase Price in 2006: £319,425 - Capital Growth over the last 10 years (2006-2016) = 72%
2 bedroom flats: Average Property Value: £1,143,270 - Average Rental Value: £4,420 (pcm) – Predicted Rental Yield= 4.63% - Average Purchase Price in 2006: £488,400 - Capital Growth over the last 10 years (2006-2016) = 85%
Wells Street (W1T)
1 bedroom flats: Average Property Value: £668,071- Average rental Value: £2,591 (pcm) – Predicted Rental Yield= 4.65% - Average Purchase Price in 2006: £332,291 - Capital Growth over the last 10 years (2006-2016) = 70%
2 bedroom flats: Average Property Value: £1,169,233 - Average Rental Value: £4,662 (pcm) – Predicted Rental Yield= 4.78% - Average Purchase Price in 2006: £577,640 - Capital Growth over the last 10 years (2006-2016) = 71%
Property Investment in Marylebone:
Cosway Street (NW1):
1 bedroom flats: Average Property Value: £563,700 - Average rental Value: £2,140 (pcm) – Predicted Rental Yield= 4.55% Average Purchase Price in 2006: £228,333 - Capital Growth over the last 10 years (2006 – 2016) = 81%
2 bedroom flats: Average Property Value: £785,000 - Average rental Value: £3,092 (pcm) – Predicted Rental Yield= 4.72% - Average purchase price in 2006: £324,666 - Capital Growth over the last 10 years (2006 – 2016) = 89%
Homer Street (W1H):
1 bedroom flats: Average Property Value: £612,461- Average rental Value: £1,956 (pcm) – Predicted Rental Yield= 3.83% - Average Purchase Price in 2006: £248,000 - Capital Growth over the last 10 years (2006-2016) = 91%
2 bedroom flats: Average Property Value: £957,333 - Average Rental Value: £3,147 (pcm) – Predicted Rental Yield= 3.94% - Average Purchase Price in 2006: £370,000 - Capital Growth over the last 10 years (2006-2016) = 95%
Chiltern Street (W1U):
1 bedroom flats: Average Property Value: £728,275 – Average Rental Value: £2,378 (pcm) – Predicted Rental Yield= 3.91% - Average Purchase Price in 2006: £339,992 - Capital Growth over the last 10 years (2006-2016) = 76%
2 bedroom flats: Average Property Value: £1,384,214 – Average Rental Value: £4,824 (pcm) – Predicted Rental Yield= 4.18% - Average Purchase Price in 2006: £515,618 - Capital Growth over the last 10 years (2006 – 2016) = 99%
Taking a look at these figures, you will notice that both Marylebone as well as Fitzrovia both generate very healthy prices for their respective property markets, and both areas express a great element of potential for possible investment opportunities. In terms of 1 bedroom flats, Fitzrovia (taking into account our 3 illustrated streets) offers an average property price of £630,094 and a very steady average rental yield between 4.64% - 4.66%. As for Marylebone, its 1 bedroom properties (again taking the chosen streets into consideration), generate a very similar average property value of £634,812 – but regarding the different rental yields, these fluctuate extremely from 3.83% with Homer Street, to 3.91% along Chiltern Street to 4.55% in Cosway Street. This shows us that for 1 bedroom properties, Fitzrovia on the surface offers a steadier expected rental yield, whereas Marylebone differs greatly between streets. This tendency to fluctuate can be seen as both a positive factor, as well as a one offering uncertainty for Marylebone, as although streets here indicate more unpredictability, it also gives more manoeuvrability for shrewd deals and could lead to amazing investment choices - should you correctly do your research. Fitzrovia, I'd say, offers a much more plain investment outlook with generic, but nonetheless positive rental yields being acquired.
Regarding 2 bedroom flats, our 3 chosen Marylebone streets generate an average property value of £1,042,182 – with the Fitzrovia average for 2 bedroom properties very closely following with £1,040,048. With respect to the buy-to-let aspects, 2 bedroom properties here in Marylebone produce a predicted rental yield in the region of 4.28%, whereas our chosen streets in Fitzrovia generate a slightly higher 4.69% annual rental yield on average. Bringing these figures into further illumination, I can tell you that prices for 2 bedroom properties are very similar between Marylebone & Fitzrovia, as was revealed to us with 1 bedroom properties – with these two areas so closely distanced from one another, they also often offer similar property prices in general. As for the rental yields, they are both quite high and would present a very profitable return on many buy-to-let investments, whether you choose to stick with Marylebone or head further East to Fitzrovia. The choice of property investment here would be more beneficially be decided with respect to potential tenant demand, as well as looking into which area's services (hospitals, universities and transport links) are more likely to bring this outcome into fruition. However, with consideration to capital growth, which is one of the most vital investment goals, Marylebone with respect to the last 10 years certainly has the upper hand over its neighbour Fitzrovia; capital growth for 1 bedroom flats circulates at around 86.66%, 2 bedroom flats offer an even more profitable growth of 94.33%. In comparison, Fitzrovia's capital growth for 1 bedroom flats totals at a much lower 73.66%, and this trend continues with their 2 bedroom properties, with a growth of 80% - which although high, is a good deal less than what Marylebone has offered over the last 10 years. Marylebone's rate of capital growth is one of the most desirable in the Central London perimeter and this is still pursuing at a great rate currently and is expected to continue at a similar, if not greater pace in the future. With the two areas so closely matched in terms of not only distance, but also property prices, rental capacities and yields, it is very much a matter of personal choice for the most and what sort of properties are available at a given time in the market, which should drive your investment ambitions. But in my opinion, as seen with the large rate of capital growth in Marylebone, this area is much faster reaching the repute of the likes of Mayfair and Belgravia than can be said of Fitzrovia. A great amount of investment has been transfused within the Marylebone area, with groups such as Howard De Walden and the Portman Estate, which has not only made Marylebone a firm investment favourite, but has also significantly improved the wealth of the overall area, including amenities, services as well as the general infrastructure in the area. In overall, a property investment in Marylebone would make great financial sense, with the area very much on the rise – should a property match your requirements and the figures correspond to them, a 1 or 2 bedroom flat in Marylebone would be a great choice and one which will generate a very healthy income for you - presently as well as in the future.
Should you require any further information regarding any properties within Marylebone and bordering Fitzrovia, would like a more personalized analysis of any particular streets, or even just a general chat on the property market - please know that I am always available for contact and welcome any of your feedback. I will always try my best to help you clarify your investment thoughts and set you off on the correct path.