As 2018 approaches, savvy property investors are on the hunt for their next move. They might be lucky to pick up a real gem at a low price, but there are plenty of properties that, with some TLC offer potential, too. Martin Bikhit, Managing Director of Kay & Co has more than 20 years’ experience in the London property sector, here he shares his 10 tips, and picks five of the best buys that may appeal to investors in 2018.
1. What should you buy?
Look for first floor apartments with modern interiors in period buildings and high ceilings. They always prove popular with tenants. Kerb appeal will attract them, then the period features combined with an open layout and clean lines will help clinch the deal.
2. Is the price right?
It is still possible to buy properties for less than £1,500 per sq. ft. around Marylebone. Most people would not compute the total area of a property by its floor area, preferring to go by number of bedrooms and other rooms, but in London and more particularly with apartments, it’s a great way to understand how much space you are getting for your money.
3. Add value
Look for the worst house in the best street. These properties inherently have extra value locked up in them. You can increase their value sometimes with just a lick of paint and a tidy up. After all, the best house in the worst street might be perfect inside, but it may be dragged down by its surroundings and there will always be a price ceiling.
Think about how easy the property is to live in and how you can maximise its value. Can you move the kitchen into the reception room to add another bedroom, or move the stairs to improve the layout? Do some research into the local area and consider the market you want to aim at, because single workers and professional couples will have different requirements from growing families.
5. Where to buy?
Location is key for rental investment. Buy near good transport links and amenities. Again, consider which market you are aiming at. Good schools are important for families, who tend to stay for longer. City centre flats appeal to workers who don’t want to commute, but they might move on more quickly.
6. And that little bit extra
Buyers and tenants love properties with high ceilings, as these give a feeling of space. Large windows that let light flood in are winners, too. Parking and outside space are always an advantage.
7. What’s outside?
There are only so many views in London. If your property overlooks a car park, make the interior the star. Add some eye-catching art or a feature fireplace to keep the eyes inside.
8. Extra outlay
Look for properties with low service charges. The average service charge in London is around £2,000 a year, according to the Association of Residential Managing Agents (ARMA), with new-builds around £1,000 more. Check what the service charge covers and watch out for doubling ground rent clauses.
9. Short leases – to buy or not to buy?
Consider this carefully, as it may represent a good opportunity to get a great flat at a low price. However, you should take advice from a specialist leasehold surveyor before you make a move. Banks might be less enthusiastic to lend on any property with less than 50 years left to run, unless you can get the current owner to apply for an extension. If you buy the property, you will not be able to extend the lease for the first two years. You should also find out how much it will cost, in case you can use this information as a bargaining chip over the sale price.
10. Get moving...
Speed is of the essence. Get your finances in order at the very least before you make an offer. You won’t be the only one looking.
Pick of the best buys for 2018:
Connaught Street, London W2 (£4.995m)
This gorgeous Georgian town house is on the market for a shade under £5m. Per square foot, this comes in at under £1,500 per sq ft., which gives it a price advantage over neighbouring Connaught Square, home to Tony Blair, the former prime minister. There are 84 years remaining on the least and there is the opportunity to buy the freehold.
Gloucester Square, London W2 (£6.35m)
This impeccably decorated town house has direct access to the communal gardens. And it’s a very rare find indeed, coming in at just under £1,550 per sq ft, yet providing six bedrooms. In this sought-after area, north of Hyde Park and close to Connaught Village, properties with four bedrooms are rare, those with five bedrooms are hard to find and those with six bedrooms are virtually unheard of. The parking is a big plus with this property, too.
Harley Street, London W1G (£1.8m)
Here’s an interesting rental opportunity. At the quieter end of this prime road near Marylebone High Street, this beautiful first floor flat has a long lease – 200 years – and has high ceilings and a lift. There are two bedrooms and two bathrooms – there’s also private parking. With a £2,000 service charge, the property has rented solidly for the past four years.
York Street, London W1U (£999,000)
This 829-sq. ft. apartment in a popular mansion block comes with two bedrooms, high ceilings and a resident porter. It’s convenient for the Baker Street Tube and is close to Regent’s Park.
For this price you also get a share of freehold which is generally considered more advantageous for owners. It means you share responsibilities for the fabric of the whole building with your fellow residents.
Gloucester Place, London, W1U (£699,950)
This property works out at £1,511 per sq. ft. It’s a one-bedroom flat located on a one-way road – but this is imminently changing to a two-way traffic flow. The changes include improving the user experience for pedestrians and cyclists. Such inside information can be a real advantage to the savvy buyer, as the move may mean an uplift to prices along the street.
• Martin Bikhit, Managing Director of Kay & Co has more than 20 years’ experience in the prime and super-prime property sectors. Contact Kay & Co estate agents for details of properties for sale or to rent in Marylebone, Bayswater, Paddington, Notting Hill, Mayfair, Fitzrovia, Regents Park and The West End (020 7262 2030; Kay & Co).