2nd June 2018
On Saturday, I showed a couple a property in Maida Vale. The property is cheap relative to the area, and we have managed to get a discount on top. The property comes with share of freehold and its own allocated parking space. It is in a secured complex with generous green spaces. These are all good boxes to have ticked from a liveability point of view.
However, the wife enquired as to an advert we had in the paper a couple of weeks ago. This was a flat on the eighth floor in W2, at the edge of the block, and therefore, has unrestricted views of London and plenty of light streaming in.
The property I showed them required absolutely no work. If the new tenants treat the property with respect there should be nothing to be done for the next ten years. It is immaculate.
The one in W2 looked like it had been tampered with. I couldn’t place whether this was really a three bedroom. Also, the kitchen, bathroom and toilet needed doing.
The investors were averse to purchasing something requiring work, purely because they did not want the hassle.
We assured them we could arrange for this to get done with minimal hassle.
The objective of the purchase was as a Buy To Let investment. Something to hold for 5 years plus.
Once the objective is defined, the solution often becomes self-evident. Most people who want to invest have a very vague idea of what they actually want. Part of our job is to help clarify what the aim of the investment is, which is not always as it first seems.
From a liveability point of view the first property comes up trumps without a doubt. Although they are both great investment opportunities, from an investment perspective, the second property in W2, wins.
This area is backed by a thorough report done by Knight Frank, which earmarked this side of the park to rise strongly over the coming years.
Obviously, the report did not foresee the uncertainties created by the Brexit vote.
This, however, is a temporary blip in the scheme of things. It’s rare a property report impresses me, often they are written in a very abstract and theoretical way with little bearing on what’s going on at ground level. This is very often the case with statistics published, which like to simplify and generalise areas, whilst the reality is very different. For example, property prices on Edgware Road W1 go from around £1,000 to £1,500 per sq. ft., and then for properties only a few minutes away prices jump to £4,500 per sq. ft.
This report has its feet firmly on the ground. It even analyses the extra supply of units in the areas, and how many of these are actually being built. The distinction is made between planning and execution.
It is important to define the purpose of the purchase, as this even supersedes getting a discount. For example, if you’re buying a property for a long term hold, getting a 15% discount on day one is not the main consideration. An analysis needs to be done on where the area, and the block, is heading over the next five years plus and why.
The couple have dealt with us previously and have purchased blind. They agreed the W2 property deal over the weekend and it has been put in lawyers hands today.
This will be a solid investment. There is huge regeneration planned for Whiteleys shopping centre and Bayswater.
The flat will rise on this wave. On a local level there is major works planned in the block as well. Although this means a large payment due from the owners, it will improve the block as a whole, so the uplift is in sync with the local area.