Marylebone block of flats part 2 - W1G facing off against W1U! Where should we be focussing our investment attentions, which area presents us with a better buy-to-let potential for this property type?!

Date Published 23 May 2016

So last week we discussed the W1H and NW1 postcodes in great depth – regarding Marylebone blocks of flats. I am very pleased to say that we received a lot of positive feedback as a result, and some of the only pieces of disappointment were that we didn`t cover other Marylebone postcodes as well, which other potential investors are currently looking at – with especial observation towards Marylebone blocks. A particular example of this feedback comes in the form of a current landlord based in the W1U area, who although successful and performing well with his properties, he is always on the lookout for new investment opportunities. Nonetheless, during his phone call with me, he expressed that from his own standpoint, he really wished that I had covered his own W1U area, as he desired to hear whether a couple of his own flats, which are incorporated within a selection of Marylebone blocks are currently faring well. He outlined that he was really impressed with ‘the unique structure of my articles` and that he would really enjoy a similar structured analysis regarding his own W1U area versus the W1G postcode, as he has been debating whether he should be expanding his property endeavours into these borders as well. Well I am never one to turn a request down from a valued reader, especially one as passionate about Marylebone as myself, plus it is only fair that I cover the other 2 main Marylebone postcodes - especially if it is in demand. Hence, I responded to him answering that I will certainly address his request and cover a selection of different Marylebone blocks in the W1U area, whilst facing off the analysis against the nearby W1G postcode. Firstly, I would like to talk a little more about the blocks of flats that are located within these postcodes and specifically the ones which I have decided to cover in my upcoming analysis. Unlike last week`s NW1 & W1H postcodes (with NW1 in particular), the perimeters of W1U and W1G encompass much less modern developments as well as ‘high-risers`, instead utilizing many more converted period blocks and especially with W1U, many converted mansion blocks. Regarding W1U, the blocks which I have chosen to assess (in terms of their investment potential) will be Wigmore Court, Portman Mansions and York Place Mansions. As their names imply, these latter two blocks are mansion blocks, which have been converted to house the many flats encompassed within; as for Wigmore Court this block has been ‘purpose-built` and instead of being converted, it was designed from the outset to inhabit its selection of flats. Concerning my choices for W1G, I have selected the following Marylebone blocks: Maybury Court, Harmont House and Melcombe Regis Court. The first two of my chosen blocks, Maybury Court and Harmont House are both popular purpose-built blocks, which feature attractive as well as modern designs, whereas Melcombe Regis Court retains its period building features, whilst also satisfying modern-day demand by now housing scores of different flats. So getting down to business then, I will be conducting an analysis using the 3 notorious and well-recognised blocks that I have mentioned from each postcode, where I will be gathering the average values of 2 and 3 bedroom flats that can be found residing here. I will also be comparing the current average rental values, the prospective rental yields, along with a documentation of the average capital growth rates recorded during the last 10 years.

Investing in a block of flats in W1G:

Maybury Court, Marylebone Street (W1G 8JF)

2 bedroom properties: Average Property Value: £974,053- Average Rental Value: £2,600 (pcm) – Predicted Rental Yield= 3.20% - Average Purchase Price in 2006: £390,000 - Capital Growth over the last 10 years (2006 – 2016) = 92%
3 bedroom properties: Average Property Value: £1,321,222 - Average Rental Value: £3,550 (pcm) – Predicted Rental Yield= 3.22% - Average Purchase Price in 2006: £490,000 - Capital Growth over the last 10 years (2006 – 2016) = 100%

Harmont House, Harley Street (W1G 9PH & W1G 9PJ)

2 bedroom properties: Average Property Value: £1,242,275 - Average Rental Value: £3,300 (pcm) – Predicted Rental Yield= 3.23% - Average Purchase Price in 2006: £512,250 - Capital Growth over the last 10 years (2006 – 2016) = 89%
3 bedroom properties: Average Property Value: £1,535,220 - Average Rental Value: £4,100 (pcm) – Predicted Rental Yield= 3.20% - Average Purchase Price in 2006: £625,000 - Capital Growth over the last 10 years (2006 – 2016) = 90%

Melcombe Regis Court, Weymouth Street (W1G)

2 bedroom properties: Average Property Value: £1,139,750 - Average Rental Value: £3,050 (pcm) – Predicted Rental Yield= 3.21% - Average Purchase Price in 2006: £495,000 - Capital Growth over the last 10 years (2006 – 2016) = 84%
3 bedroom properties: Average Property Value: £1,443,080 - Average Rental Value: £3,850 (pcm) – Predicted Rental Yield= 3.20% - Average Purchase Price in 2006: £600,000 - Capital Growth over the last 10 years (2006 – 2016) = 88%

Investing in a block of flats in W1U:

Wigmore Court, Wigmore Street (W1U 3RU)

2 bedroom properties: Average Property Value: £1,134,450 - Average Rental Value: £3,050 (pcm) – Predicted Rental Yield= 3.22% - Average Purchase Price in 2006: £430,000 - Capital Growth over the last 10 years (2006 – 2016) = 97%
3 bedroom properties: Average Property Value: £1,314,133 - Average Rental Value: £3,500 (pcm) – Predicted Rental Yield= 3.19% - Average Purchase Price in 2006: £515,000 - Capital Growth over the last 10 years (2006 – 2016) = 94%

Portman Mansions, Chiltern Street (W1U 6NS)

2 bedroom properties: Average Property Value: £1,368,325 - Average Rental Value: £3,750 (pcm) – Predicted Rental Yield= 3.28% - Average Purchase Price in 2006: £550,000 - Capital Growth over the last 10 years (2006 – 2016) = 91%
3 bedroom properties: Average Property Value: £1,872,000 - Average Rental Value: £5,200 (pcm) – Predicted Rental Yield= 3.33% - Average Purchase Price in 2006: £735,000 - Capital Growth over the last 10 years (2006 – 2016) = 94%

York Place Mansions, Baker Street (W1U 6RX)

2 bedroom properties: Average Property Value: £1,316,344 - Average Rental Value: £3,500 (pcm) – Predicted Rental Yield= 3.19% - Average Purchase Price in 2006: £520,000 - Capital Growth over the last 10 years (2006 – 2016) = 93%
3 bedroom properties: Average Property Value: £1,615,800 - Average Rental Value: £4,300 (pcm) – Predicted Rental Yield= 3.19% - Average Purchase Price in 2006: £650,000 - Capital Growth over the last 10 years (2006 – 2016) = 91%

Taking a look at some of these figures in more depth, we can decipher that both the W1G as well as the W1U areas both achieve good market value figures, with respect to all our key investment indicators and perform to a healthy financial standard. Regarding the W1G area and 2 bedroom properties, we have taken a range of different priced blocks as our models and we can see an average price here of £1,118,692; for 3 bedroom properties this average worth naturally increases and reaches a figure of £1,433,174. In comparison, our chosen blocks for the W1U district present average price tags of £1,273,073 for 2 bedroom flats, and a figure of £1,600,644 for 3 bedroom flats. Consequently, you will spot that on average and certainly with respect to our chosen blocks, the W1U perimeter illustrates quite a gap in price against the neighbouring W1G area, where both 2 as well as 3 bedroom properties are worth more in the W1U vicinity. There is an average price difference of £154,381 between W1U & W1G for 2 bedroom flats, and a slightly wider gap of £167,470 with regards to 3 bedroom flats situated within these blocks; this inequality of price however is largely due to the increased worth and prestige of the mansion blocks that populate the W1U area. In addition, regarding rental values, W1U also possesses an edge with its higher prices, where our example blocks here portray an average rental value of £3,433 (pcm) for 2 bedroom properties, and a rental capacity of £4,333 (pcm) for 3 bedroom properties. With respect to W1G blocks, the average rental worth of 2 bedroom flats here calculate around a much smaller figure of £2,983 (pcm), which also remains lower than the W1U average for 3 bedroom properties – with an average estimation of £3,833 (pcm). However, these figures level up much more proportionately when the topic of rental yields arises, where W1U blocks portray yields of 3.23% for 2 bedroom flats and a coincidently identical 3.23% yield for 3 bedroom flats; as for W1G blocks, 2 bedroom flats reach an average rental yield of 3.21% and there is only a miniscule difference with 3 bedroom flats here, where the average rental yields total 3.20%. Nonetheless, despite the almost parallelism between the W1U and W1G blocks regarding their rental yields, being picky which we must be when it comes to investment, W1U blocks do mathematically edge their rivalling blocks by 0.02% for 2 bedroom flats, and there is a difference of 0.03% with respect to the rental yields of 3 bedroom flats. Coming up to our final investment indicator now, with acknowledgement to the capital growth rates of the last 10 years, W1G blocks have achieved an average capital growth of 88.33% for 2 bedroom residences and a 92.66% growth for 3 bedroom residences. However yet again, W1U blocks reign supreme with a much more superior capital growth account of 93.66% for 2 bedroom flats, and a slight variation of 93% for 3 bedroom flats. In overall, we can judge that W1U blocks in particular have performed commendably throughout our analysis, where they noticeably surpass W1G blocks with regards to average property prices and achievable rental values. In addition, although the competition was tighter and the differences more miniscule, W1U blocks also overcame W1G blocks with regards to not only average rental yields, but completing a comprehensive victory, they also achieved higher capital growth rates for both 2 as well as 3 bedroom flats. As a result, we are led to believe that the investment potential for W1U block of flats is particularly good, which is true on average, but this should still not deter us from investment opportunities situated in the W1G perimeter either. I present this case, for as we have mentioned, a couple of our investment indicators did in fact show minimal differences between the two areas with regards to blocks of flats and as investors we should always look at individual investment prospects as they present themselves to us - merely using averages and articles such as this one as a guide or starting point. Great investment opportunities can undoubtedly be found in blocks bordering both the W1U as well as W1G areas, so keep a watchful eye on the property market daily for you never know what sort of deal is waiting just around the corner!

If you`re impressed with the investment potential of these two postcodes and would like to enquire about properties currently available within either the W1U or W1G perimeters, please give me a call and I`ll be happy to discuss your options with you. Along with these fantastic Marylebone blocks there are many others in the area that may interest you, so don`t hesitate to ask, you may just find that your ideal property investment is closer than you think!