A landlord called the office the other day wanting to discuss purchasing an investment property. He wasn’t sure whether to buy a flat or a terraced house and wanted our advice.
The average price of a flat is £133,438 , with the achievable rent for a 2 bed flat being around £600 per calendar month, offering a yield of 5.4% The average price of a terraced house is £147,813 and the average rent for a house being £625 per calendar month , offering a yield of 5%.
Looking at the yield the flat is edging it. However there are other factors to consider. For instance since ,2008 the average value of a flat has increased by 14% and the value of a terraced house has dropped by 7%. So the flat is worth more now.
But is it sellable? Having researched this area, sales in flats have dropped by 68% since April 2008 and the terrace by only 9%. Also according to the Bedford Housing Survey almost 40% of the dwellings completed since 2001 have been flats. Are we reaching saturation point? Will you be able to let the property as quickly as the terrace ?
As an investor there are also other incidental costs which may need to be factored in, management fees , ground rent and maintenance costs for example.
Want to know more, why not pop into our office in Tavistock Street to discuss your options.
