Last week, a couple from East Dulwich came to discuss potentially investing in property for Buy to Let. One of the most important considerations you will make before investing is the balance between annual return/yield and the annual value increase/capital growth. The weigh up for them was buying in one of the newer build houses in and around Abbotswood Road or a typical period house in and around Upland Road.
With this in mind, it was a surprise to find that similar sized three bedroom semi-detached houses on Abbotswood Road, have outperformed those on Upland Road. This is because a three bedroom Terraced house on Abbottswood Road can be bought in the region of £530,000 and the achievable rents can be around £1,700 per calendar month.
The net yield which could be achieved from a property on Abbottswood is around 3.60% per year. When we compare this to the possible 2.62% on Upland Road, it is over 37% higher on Abbotswood Road. However, we must remember that yield is not the sole consideration when investing in Buy to Let properties, especially in London. The average value of a three bedroom terraced house on Abbotswood Road in 2005 was £238,333, which has since risen by a very impressive 122% in the last 10 years. A three bedroom Terraced house on Upland Road in 2005 was £427,714 meaning the value has increased by 92% in the same 10 years.
If you would like more information on investing in East Dulwich’s property market, please call me or visit our offices.