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Why invest in Property in West Drayton?

Received a note from a landlord who asked the following.... I am interested in buying a buy to let property in West Drayton. Is there strong demand for rentals at the moment and what is the rental yield at the moment? Great question!

Received a note from a landlord who asked the following....

I am interested in buying a buy to let property in West Drayton. Is there strong demand for rentals at the moment and what is the rental yield at the moment?

Great question.  

Why West Drayton?

We are seeing steady interest in West Drayton from investors.  Crossrail is arriving in 2018 and we have recently seen the drawings for the nice upgrades to the station.  

What benefits does Crossrail bring to West Drayton?  A more frequent service into London and a cutting of the journey times.  Looking at timetables at the moment it takes 24-28 mins to get to Paddington and with Crossrail it will take 20.  Well not much of an improvement really?  The real benefit is when you want to go further in to London as the line no longer stops at Paddington.  So West Drayton to Canary Wharf currently takes 1h 7 mins.  Crossrail bludgeons that down to 37 mins.  Now you are beginning to see it.....

Crossrail, like railways and canals have progressively been doing in Uxbridge and West Drayton for the last two hundred years. brings the capital that much closer to leafy Hillingdon.

What's rental demand like in the area?

First of all I know of no tenant who says "Crossrail is coming in 2019, thus I want to live near a station now!"   In fact I know precious few people who still use the word thus... but never mind.

So demand because of Crossrail is currently zip, aside the odd construction worker perhaps.  But it's not really registering at the moment.  But that will change.  You as an investor are looking for that increase in demand but also capital growth as the rest of the housing market catches on to what a good thing this whole Crossrail is.

As every one is touting it at the moment this report on West Drayton and Crossrail makes interesting reading for those interested in Crossrail and West Drayton.

So down to hard numbers.  There were 15,148 Rightmove searches for rental property in West Drayton and Yiewsley in the last month.  Yiewsley is the northern half of West Drayton, one side of the canal from the station.  

Is 15,148 searches a lot or a little I hear you ask?

Well its a lot.  Using Hillingdon ward data and comparing that to Rightmove searches I came up with this little table.  What it shows is the popularity amongst Rightmove customers for a location compared to how large it is (based on population).  Rental demand is high in Uxbridge.  Uxbridge has 18,000 students so there will always be be demand here and a lot of searches generated.  It is also just better know than other areas so is more likely to be used as a search destination.  But West Drayton compares well to surrounding areas in this pre-Crossrail age that tenants are living in.

Area

RM Searches

Population

RM Search to Pop Ratio

Uxbridge, Brunel and Cowley 38,731 39,868 0.97
Ruilsip 18,126 31,000 0.58
West Drayton and Yiewsley 15,148 27,349 0.55
Hillingdon 6,626 12,906 0.51
Ickenham 4,583 10,387 0.44
Northolt 10,096 30,300 0.33
Hayes, Harlington and Yeading 25,148 95,763 0.26

 So demand is good in West Drayton amongst residents without Crossrail.  I maintain that tenants are primarily drawn to an area by employment.  The area has a lot to attract tenants, with employment in near Heathrow, Stockley Park, Hayes and Uxbridge aside from area just being attractive to commuters using the existing First Great Western route into London.

What are the Rental Yields Like in West Drayton?

 I took a look at yields recently in West Drayton which are currently running at between 3.8% and 7.2% with an average two bedroom flat yielding around 5.6% and a two bed house around 4.2%.   Combine that with expected capital growth in the area and you have a powerful story.

This table shows what the asking price for property is and compares that to rental bands to give an idea of the range of yields available.  Especially low or high prices can skew the data a little as see in the 3 Bed range.  But this should give you a flavour for what is achievable.

Property Type Value Rent Yield
Low High Low High Low Average High
Studio 112,000 130,000 625 750  6.7% 6.8% 6.9%
1 Bed 137,500 250,000 775 1,250  6.8% 6.3% 6.0%
2 Bed (Flats) 170,000 339,950 975 1,400  6.9% 5.6% 4.9%
2 Bed (Houses) 249950 375,000 975 1,200  4.7% 4.2% 3.8%
3 Bed 199,999 500,000 1,200 2,200  7.2% 5.8% 5.3%

If you have any questions about investing in the West Drayton Crossrail market feel free to get in touch for a chat.  We can talk over what is available to buy in the area or show you and explain the whole process of letting.  Jeremy Wasden 01895 257935.

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