London has always been the city made up of a large number of flats as you would expect. There are over 15,368 flats in SE15, over half of the total housing stock at 54% but slightly less than the average for the South East which lies at 57%. Nationally the figure is 17%. The average asking price for a 1 bed flats in SE15 currently stands at £283k and £373k for a 2 bed.
A two bedroom flat in the South City development on Peckham Grove sold in September 2014 for £342k which would rent out for about £1400 pcm. This would give any “would be landlord” a gross yield of 4.9% which isn’t spectacular but you should also consider capital growth when look at Peckham properties. You must also consider that every landlord’s tax and interest rates are different, so it is essential to research your investment carefully before making any commitment. Based on my calculation this property would still give a Return On Investment of approximately 5.8% using a 75% LTV mortgage.
Finally, let’s not forget about the potential increase in capital value of the property. This property in the South City Development originally sold for £194k in August 2005. That’s a 76% increase in value which tracks very closely to the overall figure for this area over the same time period of 83%. On the face of it this development seems a good choice for a buy to let landlord that will give a good return on investment and strong capital growth.
If you would like some advice about what could make a good investment, please visit our offices .