East Dulwich sees 14% "Real Yield" when investing in the rental market
I was talking to a landlord from Dulwich Village the other day about the East Dulwich property market, and we were discussing my recent articles in the East Dulwich Property Blog. With all the news about house prices, he wanted to know what had happened to average property prices since the start of 2014. I told the Landlord the ‘average value of a property’ in SE22 is now £651,300, and this has been relatively flat for three months running. The average rent being asked in East Dulwich is around £1,607 pcm, which means the gross yield when considered on its own is not that spectacular at 3% per year. However, since the start of 2014, the average value of a property in SE22 has risen by 11%, meaning landlords achieved a total return (real yield) of 14%.
You can’t get his sort of return from a bank, so a buy to let could be a good investment for you as long as you are careful and do your due diligence first. I went on to discuss with the Landlord how the East Dulwich (using East Dulwich Ward Data) property market had altered since 2001. In the 2001 census, of the 4,650 households in the East Dulwich ward, 849 of those households (or 18.25%) were privately rented. By the 2011 census, 647 new properties had been built in East Dulwich, most of which were bought by Buy to Let investors. That brought the total to 1,318 properties that were rented out to tenants .. that’s a lot of rented houses! Interestingly though, East Dulwich is above the London average for renting as 24.8% of its households are rented compare to the London’s average of 23.7%.
Don’t get me wrong, there are still pitfalls. My message to all the people of East Dulwich is this, take some independent advice before making a property purchase unless you’re 100% sure of what you’re doing. That way you will get some real input on whether the property you are considering will rent at a price the makes your numbers stack up. That’s the sort of help and advice we are always happy to give so why not come and see us at our office’s on Dog Kennel Hill in East Dulwich? Alternatively email me direct for any opinion on Javed@fishneedwater.com