Property Update - East Dulwich SE22 - One bedroom flats in Highwood Close SE22, are they good investments?
There are over 6,646 flats in SE22, a whopping 49% of the total housing stock but slightly less than the average for the South East which lies at 57%. Nationally the figure is 17%. The average price of a 1 bed flat in SE22 currently stands at £389k and £460k for a 2 bed.
You can buy a one bedroom flat in the development on Highwood Close, for a very reasonable £300,000, one went under offer in October for around this figure. A 1 bed property in this location would rent for around £1200 pcm giving a gross yield of 4.8%. . However, you must remember that every landlord’s tax and interest rates are different, so it is essential to research your investment carefully before committing but based on my rough calculations this property would still give a Return On Investment of approx 4.87% using a 75% LTV mortgage.
Finally, let’s not forget about the potential increase in capital value of the property. The property that went under offer in October in the Highwood Close development originally sold for £185k in 2006 when the property was first built. That’s a 62% increase in value, however you can see the premium often paid for brand new developments as this whole area was built in 2006. The market in SE22 rose by an average of 83% over the same time period. A lesson to be learned from this would be always be wary of buying off plan and really do your research to make sure any discount you are getting is real. That said these flat represent good value for the area now.
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