I am constantly asked this question: ‘Do you think Two bedroom flats in East Croydon are worth investing in?’. It is normally asked by first time investors, inexperienced investors and / or out-of-town investors. And with good reason, Croydon is a huge place, and if you don’t know the area, how would you know the difference between East Croydon and West Croydon and South Croydon property market…Google Maps can only show you so much, and let’s be honest, Estate Agents will typically just tell you what you want to hear. Well… it’s a good thing you have found me then isn’t it!
So, back to the question…
Are Two Bed Flats in East Croydon Good Investments?
Short answer… YES.
Long answer… It can depend on what you are looking for, but in the end, unless you are paying a CRAZY high price, still… YES.
Are they as good as One Bed Flats in Croydon? Well… A while ago I wrote a blog on why one bedroom flats are so good to buy in the Croydon Area. You can make your own decision… You can’t go wrong with either.
There are over 25,490 flats in the CR postcode as of writing. Flats accommodate around 38.15% on the total housing stock in Croydon, which is an insanely huge number. These figures are based on the 2011 census (next census to be most likely released 2021), and as we know, Croydon is going under huge development, so these figures are going to sharply increase in the next few years. The national average of flats in a city is just 17.42%.
The average price of a 2 bed flat in CR0 is £252,753 which has had a staggering 38.97% increase in value since 5 years ago.
When we dive deeper into East Croydon specifically we see some mind-blowing figures (bearing in mind we are still in Croydon, not LONDON):
Average price for 2 bed flat in East Croydon: £409,124
Average current asking rent for 2 bed flat in East Croydon: £1308 PCM
Now if you use those two figures blindly, you will notice that the Average yield is 3.84%. Not all that impressive is it? Well, it depends on which way you look at it.
Why is property in East Croydon so Expensive and how did the price get so high?
Property in East Croydon is on the up, and it’s moving up fast. The average price will have been boosted by the large number of new developments, and the vast majority of these have capitalised on building 2 bed flats (they know the game).
All of these new build flats have the ‘London Look’ – minimalist, simple and sleek.
With that, the new build developers are pushing for higher prices, and their questions will be directed straight to the local well performing Estate Agents.
Essentially it is Estate Agents that determine the price, and the leading ones, who have the knowledge of the area, will be the ones setting the sale and rental price.
For example, 2 bed flat The Island (formerly IYLO) near East Croydon Station have been set to rent at around £1500pcm and sell upward of £400,000. This is quite standard now for Croydon new build flats.
Why Should I invest in East Croydon then?
Like I said at the start of this blog, investing in new build 2 bed flats in East Croydon is quite a safe bet.
I can hear you shouting ‘rental yields will be terrible!!!!!’, and YES you are correct, while you will find better yields elsewhere in Croydon, or even possible in East Croydon older flat, you will be hard-struck to find properties that are going to appreciate in capital value as quickly as these large new build properties. Why? Because these new build properties will only attract one type of person. It is the same type of person that has been populating large developments like The Island, Saffron Tower, The Edridge and all the other new developments in Croydon… The London Worker traveling from London (Victoria, Bridge, Clapham etc), who have the money but can’t afford the insane London rents, and will settle for travelling for 20 minutes to save £100s per month. They still want that London feel though, in high buildings, with a concierge, a gym etc, and they will get that in these new developments.
So… you are investing in CAPITAL GAIN in East Croydon. NOT rental yield. But wait! infact, due to Croydon’s regeneration schemes, your rental price will be increasing at an alarming rate too! So, while I can’t see you ever getting near the 5% mark, you may not be far off. You will be happy when you call the local Agent to value your property in 3 – 5 – 7 years time though!
I currently have hold of a few off-market developments in Croydon, quite literally a stone’s throw away to the new Westfield’s, very close to the East Croydon Station and honestly a Prime location for investors. And they are very well priced too, just drop me a line / email / text on 07957336956 / firstname.lastname@example.org and I will get you over a brochure of what I think can make you some serious money in East Croydon.