Date Published 19 September 2016
Of late we seem to have taken a huge step towards the bigger property investment scene, where investors have not only taken the direction of 2 and 3 bedroom properties recently, but our weekly articles also seem to have followed this trend too. Of course, this is likely the most beneficial buy-to-let route to take, as this investment choice would rake in significantly more income than a Studio or 1 bedroom property, but what about those investors who choose to buy cheaper homes, have a smaller budget, or simply prefer dealing with smaller properties?... So what or who has prompted me to shift my direction? – For as you may have noticed by now, my articles and general writing concerning the Marylebone property market are very much influenced by the feedback, calls and emails that I receive during my working week. On this occasion, my featured inspiration derives from speaking to a client, who is looking to enter not only the Marylebone market for the first time, but also the buy-to-let property industry as a whole. As a newcomer, he expressed that he was interested in a low-risk investment prospect on the lower scale of the cost spectrum, as although he is extremely enthusiastic – he certainly doesn't have a great deal of experience. I did begin to assure him that property investment – especially in Marylebone's booming industry, is one of the surest assets you could add to your portfolio, with capital growth prices constantly increasing, a steady rental structure in place, and plenty of local as well as off-shore interest in the area. Nonetheless, we agreed that there are undoubtedly some fantastic studio, as well as 1 bedroom residences to be found on the market, with commendable financial returns to be made – whilst limiting the initial expenditure on the purchase price; low risk and a low price, along with a potentially solid buy-to-let investment to be acquired, we were certainly both in agreement and reached the same wavelength. So to briefly introduce Studio flats, this term refers to a living space where the sleeping area and living area are conjoined into one central room, there are usually no other major rooms other than in some cases there being a kitchen, which could be separated by a counter – but occasionally there is no kitchen at all and the tenant sometimes has access to a common kitchen. Many studio apartments typically contain their own private bathroom, which is usually separated by its own quarters – but the main and critically defining difference between studios and single bedroom homes is that the latter always has a separate bedroom whilst a studio almost never does. In addition, studio flats are generally the smallest and cheapest type of apartment to buy or rent in not only Marylebone, but in any given location; they appeal to smaller budgets, long distance commuters or those looking to spend short time-spans at the residence. Studio's vary widely in consideration to size, cost, along with the services provided, and prices here are very much influenced as well as attributed according to the square footage of the residence; but also the postcode, street and overall London area in which the property is located within. Moving onto the slightly bigger 1 bedroom properties, these almost always have a full kitchen as well as a dining area, which is usually an extension of the reception room; as a general rule these properties are made of a living room, bedroom, bathroom and kitchen. In addition, 1 bedroom homes are mostly suited to individuals and couples looking for slightly more space, than a Studio apartment provides; the separate sleeping area of a single apartment allows the tenants a greater element of privacy and control over their living space. Moreover, 1 bedroom homes are more functional than their Studio counterparts, where these Marylebone homes offer on average between: 380 sq ft – 600 sq ft, whereas Studio apartments in this area are more commonly associated with measurements of 250 sq ft to 450 sq ft; 1 bedroom properties afford more convenience to live comfortably and host guests in a more complete environment. Reassembling our thoughts to the present investigation then, in order to uncover whether Studio or 1 bedroom homes in Marylebone possess better buy-to-let prospects, I shall be studying a wide range of streets in the borough across the different postcodes – analysing the many properties of this type that are located here. To begin this research, a selection of 5 streets shall be selected and utilized as our focus points, from which I will be gathering up some key investment variables including: the average values for Studio and 1 bedroom properties along each street, as well as the average rental worth of each of these addresses. My examination will also revolve around me accumulating the predicted rental yields that a prospective investment here would bring, along with the capital growth rates documented in each street during 2006 through to 2016.
Examining the investment prospects of Studio and 1 bedroom properties in Marylebone:
Seymour Place (W1H 5TH, W1H 2ND, W1H 2NL):
Studio properties: Average Property Value: £472,262 - Average Rental Value: £1,450 (pcm) – Predicted Rental Yield= 3.68% - Average Purchase Price in 2006: £212,000 - Capital Growth over the last 10 years (2006 – 2016) = 80%
1 bedroom properties: Average Property Value: £679,750 - Average Rental Value: £2,100 (pcm) – Predicted Rental Yield= 3.70% - Average Purchase Price in 2006: £270,000 - Capital Growth over the last 10 years (2006 – 2016) = 85%
Bickenhall Street (W1U 6BR, W1U 6BT, W1U 6BX, W1U 6BW):
Studio properties: Average Property Value: £473,133 - Average Rental Value: £1,300 (pcm) – Predicted Rental Yield= 3.29% - Average Purchase Price in 2006: £212,000 - Capital Growth over the last 10 years (2006 – 2016) = 81%
1 bedroom properties: Average Property Value: £718,500 - Average Rental Value: £2,000 (pcm) – Predicted Rental Yield= 3.34% - Average Purchase Price in 2006: £317,000 - Capital Growth over the last 10 years (2006 – 2016) = 82%
Cato Street (W1H 5HH, W1H 5JG, W1H 5JH):
Studio properties: Average Property Value: £459,888 - Average Rental Value: £1,350 (pcm) – Predicted Rental Yield= 3.52% - Average Purchase Price in 2006: £203,500 - Capital Growth over the last 10 years (2006 – 2016) = 82%
1 bedroom properties: Average Property Value: £616,500 - Average Rental Value: £1,850 (pcm) – Predicted Rental Yield= 3.60% - Average Purchase Price in 2006: £262,000 - Capital Growth over the last 10 years (2006 – 2016) = 86%
New Cavendish Street (W1G 9UG, W1G 9TN, W1G 8UA):
Studio properties: Average Property Value: £476,000 - Average Rental Value: £1,250 (pcm) – Predicted Rental Yield= 3.15% - Average Purchase Price in 2006: £208,500 - Capital Growth over the last 10 years (2006 – 2016) = 83%
1 bedroom properties: Average Property Value: £688,000 - Average Rental Value: £1,825 (pcm) – Predicted Rental Yield= 3.18% - Average Purchase Price in 2006: £300,000 - Capital Growth over the last 10 years (2006 – 2016) = 83%
Weymouth Street (W1G 8NS, W1G 8NT, W1G 6NZ, W1G 8NN):
Studio properties: Average Property Value: £481,000 - Average Rental Value: £1,275 (pcm) – Predicted Rental Yield= 3.18% - Average Purchase Price in 2006: £215,000 - Capital Growth over the last 10 years (2006 – 2016) = 81%
1 bedroom properties: Average Property Value: £709,000 - Average Rental Value: £1,900 (pcm) – Predicted Rental Yield= 3.21% - Average Purchase Price in 2006: £305,000 - Capital Growth over the last 10 years (2006 – 2016) = 85%
Taking a look at our collected results, the smaller property investment scene definitely portrays itself as a sound market, offering shrewd, cost-effective property deals that make financial as well as investable sense; although the income generated from a prospective buy-to-let asset here may not rake in as much financial return as a larger residence, it still does offer a good overall scheme, where profits and a good business can certainly be achieved. Regarding average property values, studio flats, with respect to all five of our chosen Marylebone streets, arrives at an average price of £472,456, whilst 1 bedroom properties come together to form an average buying figure of £682,350. Across our five streets, the differences in property prices are quite narrow for both Studio along with 1 bedroom flats, but nonetheless you will still notice that for Studio apartments the cheapest properties are situated along Cato Street (W1H) with an average worth of £459,888, whereas the most expensive properties can be found within W1G's Weymouth Street costing £481,000 on average. As you can see there is a minimal difference of only £21,112 between the most cost-effective and the highest-priced residences, showing us a perfect example of the low-priced reputation of this property type. As for 1 bedroom properties, you are once again likely to encounter the most discounted properties along Cato Street (W1H), whilst the most expensive 1 bedroom homes are shown to be on Bickenhall Street (W1U) at an average cost of £718,500. Next up for the rental figures, these show us that studio flats within Marylebone possess an average rental worth of £1,325 (pcm), whilst 1 bedroom addresses portray a naturally higher capacity of £1,935 (pcm). According to our findings, whilst paying attention to our Studio flats, we can see that the street with the most rental capabilities is Seymour Place (W1H) with a monthly worth of £1,450, whilst New Cavendish are narrowly displayed as the lowest rental earners with an average worth of £1,250 (pcm). Furthermore, Seymour Place, as well as raking in the most rental income every month on average for both studio and 1 bedroom homes, it also generates the most effective rental yield values with 3.68% for Studio apartments and 3.70% for their 1 bedroom counterparts; also worth mentioning is that Cato Street (W1H) arrives at a close second place for both these property types. Last but not least, whilst examining the capital growth readings across our five streets, Studio flats across Marylebone had an average growth of 81.4%, and the best average growth rates over the last 10 years were found within New Cavendish Street at 83%; conversely the slowest growers during the same time period were situated within Seymour Place (W1H). With regards to 1 bedroom properties, Marylebone's last 10 years capital growth average stands at 84.2%, with homes along Cato Street (W1H) generating the highest reading of 86%; the lowest average can be found along Bickenhall Street (W1U) at 82%. To conclude our results, we can see that 1 bedroom properties are clearly the better all round investment prospect to be found within Marylebone, with better overall readings for monthly rental accounts, average rental yields and the capital growth levels of the last 10 years. However Studio flats for individuals with a smaller budget or with a preference in this direction can certainly find great investment deals as well, with readings closely following 1 bedroom properties and decent financial accounts are definitely still to be attained here.
By the way, should you find yourselves interested in not only this article, but with the smaller investment scene in Marylebone as a whole – with Studio and 1 bedroom flats as your preferences at this moment, then I'd like to comfort you all by welcoming your requests or queries, as well as offering myself generally with any advice on the market that you may need. There are plenty of studio, along with single bedroom apartments currently available on the market, which vary sometimes very subtly or at other times dramatically - in terms of their square footage measurements, prices, rental worth, tenant demand as well as the services that can be utilized in the surrounding area. Thus a helping hand with experience, knowledge of the area, and the finances behind the market could be of paramount importance when aiming to filter the wide array of properties currently on display.
