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How are Studio Investments performing South of the A40 in Hillingdon?

Was talking to a landlord investor friend of mine who owns a few studio flats in the area? How's the market doing he wanted to know and what was happening to rents and prices was the direction of his thoughts.

I was talking to a landlord investor friend of mine who owns a few studio flats in the area  How's the market doing he wanted to know and what's happening to rents and prices was the direction of his thoughts.  We talked it over and this was what I was able to pass on...

There seems to be a few different markets for studios to let to me in West Drayton, Hayes and Uxbridge and across most of Hillingdon, so lets run through them.

Studio's to Let with bills included: Granny Annex

These tend to be part of other properties with what used to be called granny flats being let out.  I don't tend to deal with these much as owner occupiers tend to let them to single people or couples and they are attached to their main residence and family home.  Price achieved depend on the space available and tends to range from rents of £500pcm to £750pcm.  

Studio's to Let with bills included: HMO's

The other types are larger rooms in HMO's (houses of multiple occupancy) where the landlords will pay council tax, utility and broadband bills.  Tenants will share a fully equipped kitchen but have limited cooking facilities in rooms depending on the space available.  

 Standard Studio Flats

Studio Flat Living Room

As independent properties these will rent for around £700 rent per calendar month with a range between £650pcm and £750pcm really quite typical.  We see property like this in Clarkes Drive, Whitehall Road, around Hawthorne Crescent in West Drayton and in Newcourt Cowley, just off Benbow Waye.  When well presented these are always in good demand.

Back in 2012 we were looking at prices of around £115,000 for a studio.  Nowadays over £150,000 is common, with the cheapest studio in Hillingdon priced at £165,000 on Tasker  Close, Harlington, just to the North of Heathrow and the Bath Road.  Back in 2012 rents used to start at around the £550pcm mark.  

Caroline Close

With the rise in prices and smaller rises in rents, yields are lower if you buy now than the 6% we used to see but taking a rent of £700pcm and a purchase price of £165,000 still makes a gross yield of 5.1%.

The challenge for landlords in a good area with a decent sized studio flat is to move them into the next category of property to bridge the gap between the two in rent levels.

Luxury Studio Flats

There seems to be a separate market for luxury studios in our area.  These properties will typically be close to railway or tube stations with good links into London.  

Here you are making use of the transport connections to attract well paid commuter tenants. 

Clearly the investor here is thinking about comparables across London rather than the price of local studio flats, the prices are there to be seen when comparing with Harrow or Ealing.

The new build studios certainly aim for this market but you are usually looking at areas line the Parkwest development in West Drayton, the Navigation, Vantage, Trident and Cardinal Buildings at Highpoint Village over the Hayes and Harlington station.  

Currently on the market are examples at Waterways House on Bentinck Road very close to the station at West Drayton.

Rents in Luxury Studios are around the £1,000 pcm mark (with a range of £900pcm to £1100pcm) with an emphasis on good levels of maintenance to keep the property in attractive order to keep a high standard fitting with a concierge service typically provided elsewhere in these developments.

The prices of these well appointed studios are around £270,000 with a range of between £240,000 and £300,000.  So the higher price means yields are lower at around 4.4% with services charges to pay, higher than standard studios.

However located in desirable locations in great surroundings the prospect of capital growth near Crossrail stations and tube lines has to be positive over the longer term. 

West Drayton

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