Date Published 16 May 2016
When it comes to Central London in general, and especially with Marylebone, flats are the most commonly exchanged properties on the property market and the most widespread property type available in Marylebone as a whole. Thus, there is no wonder that week after week the greatest volume of enquiries that I receive regarding investment in Marylebone usually revolves around different flats in the area. A particular instance outlining this premise came a few days ago, when I received a very interesting subject presented to me by an overseas investor, who has been in regular contact with me lately. He was clear in his desire to acquire a flat in an important, well-known block within Marylebone that has great investment potential, but he was unsure of which block exactly he should concentrate his thoughts on, so he plainly asked me: What Marylebone block of flats (and type of block) has the best investment potential currently, with respect to 1 and 2 bedroom apartments? I immediately told him that in my opinion, the NW1 as well as the W1H postcodes would be a great place to start, as there is a great selection of Marylebone blocks here. Furthermore, whilst I did mention a few great blocks that I know have performed very well over the last couple of years, I concluded that I would definitely undertake some thorough research and get back to him shortly. There are a great range of blocks of flats in Marylebone that come into an assortment of different property types including a few such as: period and mansion blocks, as well as purpose-built blocks and modern-gated developments. NW1 blocks most commonly feature modern developments built for the purpose of encompassing flats, whereas many of the blocks in the W1H area are very much period buildings, which have been converted and modernised to blocks. These converted blocks nonetheless host a great array of flats, and satisfy modern-day demand, whilst still retaining their period features as well as traditional feeling. Thus, the selection of 1, 2 and 3 bedroom flats are much greater in the NW1 area, with a superior quantity of new housing developments and high risers, which also integrates more flats within the building's premises. On the other hand, quantity doesn't necessarily mean quality – or more specifically a better investment potential, so there is a lot to be gained from the W1H area too. But arriving back to the task at hand, in order to not only aid my overseas investor in finding the best Marylebone block to invest in, I hope to also be of service to my dear readers, who I trust will find this research useful to their own investment endeavours as well. I will be comparing a total of 6 well-known Marylebone blocks, 3 from the NW1 perimeter and the same number from W1H; I shall focus upon the average values of 1 & 2 bedroom flats in these quarters, where I will conduct an analysis of the average asking prices, the current achievable rental values, predicted annual rental yields, as well as an account of capital growth rates during the last 10 years.
Investing in a block of flats in NW1:
Marathon House, Marylebone Road (NW1)
1 bedroom properties: Average Property Value: £624,500 - Average Rental Value: £2,250 (pcm) – Predicted Rental Yield= 4.32% - Average Purchase Price in 2006: £312,000 - Capital Growth over the last 10 years (2006 – 2016) = 70%
2 bedroom properties: Average Property Value: £1,040,670 - Average Rental Value: £3,750 (pcm) – Predicted Rental Yield= 4.35% - Average Purchase Price in 2006: £510,000 - Capital Growth over the last 10 years (2006 – 2016) = 72%
Palgrave Gardens (NW1)
1 bedroom properties: Average Property Value: £669,211 - Average Rental Value: £2,450 (pcm) – Predicted Rental Yield= 4.39% - Average Purchase Price in 2006: £346,000 - Capital Growth over the last 10 years (2006 – 2016) = 66%
2 bedroom properties: Average Property Value: £1,185,000 - Average Rental Value: £4,400 (pcm) – Predicted Rental Yield= 4.45% - Average Purchase Price in 2006: £591,200 - Capital Growth over the last 10 years (2006 – 2016) = 70%
Dorset House, Gloucester Place (NW1 5AH)
1 bedroom properties: Average Property Value: £548,728 - Average Rental Value: £2,000 (pcm) – Predicted Rental Yield= 4.37% - Average Purchase Price in 2006: £270,000 - Capital Growth over the last 10 years (2006 – 2016) = 71%
2 bedroom properties: Average Property Value: £986,000 - Average Rental Value: £3,600 (pcm) – Predicted Rental Yield= 4.38% - Average Purchase Price in 2006: £480,000 - Capital Growth over the last 10 years (2006 – 2016) = 72%
Investing in a block of flats in W1H:
Varsity Court, Homer Street (W1H 4NW)
1 bedroom properties: Average Property Value: £646,000 - Average Rental Value: £1,900 (pcm) – Predicted Rental Yield= 3.52% - Average Purchase Price in 2006: £300,000 - Capital Growth over the last 10 years (2006 – 2016) = 77%
2 bedroom properties: Average Property Value: £1,044,000 - Average Rental Value: £3,100 (pcm) – Predicted Rental Yield= 3.56% - Average Purchase Price in 2006: £460,000 - Capital Growth over the last 10 years (2006 – 2016) = 82%
Dudley Court, Upper Berkeley Street (W1H)
1 bedroom properties: Average Property Value: £563,857 - Average Rental Value: £1,750 (pcm) – Predicted Rental Yield= 3.72% - Average Purchase Price in 2006: £240,000 - Capital Growth over the last 10 years (2006 – 2016) = 86%
2 bedroom properties: Average Property Value: £971,888 - Average Rental Value: £3,000 (pcm) – Predicted Rental Yield= 3.70% - Average Purchase Price in 2006: £370,000 - Capital Growth over the last 10 years (2006 – 2016) = 97%
Landward Court, Harrowby Street (W1H 5HB)
1 bedroom properties: Average Property Value: £610,000 - Average Rental Value: £ 1,800 (pcm) – Predicted Rental Yield= 3.54% - Average Purchase Price in 2006: £290,000 - Capital Growth over the last 10 years (2006 – 2016) = 75%
2 bedroom properties: Average Property Value: £1,092,545 - Average Rental Value: £3,250 (pcm) – Predicted Rental Yield= 3.55% - Average Purchase Price in 2006: £410,000 - Capital Growth over the last 10 years (2006 – 2016) = 98%
From our results, we can see that flats incorporated within blocks situated in both the NW1, as well as W1H area, both prove to be worthwhile potential investments that certainly make financial-sense and achieve a market value or higher investment rating. But now unpicking and magnifying these figures, I can tell you that our NW1 representatives form an average asking price of £614,146 for 1 bedroom properties and £1,070,556 for 2 bedroom properties. These average prices are very similar to those achieved in the W1H perimeter: 1 bedroom flats come to an average worth of £606,619, and this rises to £1,036,144 for 2 bedroom flats. Although our averages portray higher prices in the NW1 area, this is minimal and we can say that the two areas hold similar price brackets for both 1 and 2 bedroom properties; there is only a £34,412 average price difference with 2 bedroom properties (between NW1 & W1H) and an even lower £7,527 difference for 1 bedroom properties. Nonetheless, whilst price ranges may fall within the same bracket, there is a wider bridge between the two areas with respect to rental prices and yields. Amongst 1 bedroom properties in W1H the average rental value calculates at around £1,816 (pcm), which generates an average rental yield (yearly) of 3.59%; as for 2 bedroom properties, the rental capacity is naturally higher and rises to £3,116 (pcm) – in turn producing an estimated annual yield of 3.60%. In comparison, NW1 produces much higher results in this investment field, with a much higher average rental yield of 4.36% and rental values also greater with an average of £2,233 (pcm) for 1 bedroom properties; for 2 bedroom apartments a high yield of 4.39% is also achieved with an average rental worth of £3,916 (pcm). So NW1 blocks certainly bring about a better investment outlook that W1H in terms of its rental features, but how do the two areas compare when we analyse the capital growth? Well if we look at the capital growth of the last 10 years with NW1, we can see an average growth of 69% for 1 bedroom flats and a 71.33% growth for 2 bedroom residences. However, this time W1H outperforms its neighbouring postcode with higher capital growth rates for both 1 and 2 bedroom properties, with the former achieving a 79.33% growth and the latter bringing about an even more advanced growth rate of 92.33%. The difference here generates quite a margin, with 1 bedroom properties within the W1H area acquiring a 10.33% increased growth rate than NW1, and for 2 bedroom properties this margin between W1H and NW1 is almost doubled with a difference of growth reaching a massive 21%! Consequently, we can see that both these areas hold key, but very different investment strengths, where although property prices are fairly even, W1H and NW1 tense their muscles in very different directions – NW1 produces much higher rental capabilities and annual yields, whereas W1H clearly outperforms their rival with regards to capital growth. Whether you decide upon an investment in either the NW1 or W1H areas, you will certainly be acquiring a very efficient investment package whatever way you look at it, just keep in mind your investment goals as well as preferences, and you will undoubtedly be pleased with your future prospects.
If you would any more information regarding any of the Marylebone blocks that I have outlined in the NW1 & W1H areas, or any other blocks you may be interested in around Marylebone, please contact me and I will personally discuss some investment opportunities with you. There are some great 1, 2 and 3 bedroom flats available in some of these blocks at the moment, so get in touch!
