If you have been following my blog you probably already know the answer to this in its shortest form.
For those that do know, I decided to go into more depth into it.
There are over 25,200 flats in Croydon. This represents 37.81% of the housing stock in the CR0 postcode with the national average being far lower (as expected) at only 17.38%. In all honesty, and anyone who lives or knows about Croydon will know that it is slowly (or quickly, depending on how you look at it) turning into a mini London. Houses and office blocks are rapidly being bought to turn into flats. And they are mostly luxury apartments, bringing those overseas and London buyers / tenants.
The average price of flats in Croydon with one or two bedrooms is around £237,040 which is 6.05% higher (£18,127 change) from this time last year.
Buying an Off Plan / New Build One Bedroom Flat in Croydon
Now many of you will also know that my agency holds listings for 8 new developments in Croydon, so I am able to give you some good figures in terms of rental and sale prices. If you want further details from this point, do feel free to give me a call.
You can buy a one bedroom flat in one of these new developments in Croydon on the High Street – CR0 9 (prime location) for £262,950. They are around the 400 SQ.FT range, so of average size, but naturally with all new developments in Croydon, the quality is outstanding. This particular development has some unique features, like fully digital entry system and high-tech modern equipment, with 24hr concierge etc.
Buying in a new development is slightly different to the standard procedure. First of all, there is nothing to look at (most of them are still just patches of mud) so you will be basing your purchase on floorplans, figures and in most cases, a showroom. You would pay a £2000 reservation fee, 10% (£26,295) and then the rest on completion. You can get a ‘first time buyer’ mortgage on this too, however you will need a specialist broker who knows what they are doing in this field (I have one that has been outstanding for all of my clients).
Is it worth buying Off Plan / New Development?
In short, Yes, I personally believe right now it is a good idea. You can sell your investment prior to completion, and as these buildings complete, they will increase in value, especially in Croydon as the closer and closer it gets to 2018 (estimated completion date of Croydon Westfield’s and other developments complete too). Demand will be very high at this time. If you think forward for a second, in 2018, when the grand opening of Westfield’s, Croydon, is announced, investors at that time will be wanting to purchase property as close to the shopping centre as possible, thinking it will increase in value from then onward. Imagine for a second that you bought a 1 bed flat in Stratford prior to Westfield being built, and then sold it even just a few weeks after the opening. You will make money right? Right.
Rental Yield for Off Plan One Bedroom Flats?
Well, you will be quite surprised here. Currently holding almost 1/3 of all the flats in The Island to rent (2 beds @ £1500pm), I know what people will pay for quality. You will be looking at around £1150 – £1200 pm for a one bedroom flat in Croydon. That’s giving you a yield right now of 5.25% (and believe me it will rent). That’s not bad is it! Now imagine that in 2018 with the name Westfield’s next door.
Remember that every landlord’s tax and interest rates are different, so it is essential to research your investment carefully before committing.
Buying an Existing One Bedroom Flat in Croydon
I list plenty of deals on this site (www.CroydonPropertyNews.co.uk) daily, every other day or sometimes every other-other day (what does that even mean…) with various types of investments in Croydon. Naturally many of them will be flats (as I stated above, 37.81% of Croydon’s (CR0) Property Market are flats), so you will see that there are in-fact plenty to choose from. However, Croydon is actually currently in quite a rare situation, which does not happen in many areas. And once it does happen, it rarely happens again in that town. There are in-fact more developments in Croydon in which you can buy flats in than you can buy existing flats.
Benefits of Buying an Existing One Bedroom Flat in Croydon
The first positive aspect of buying an existing flat is that you have power to negotiate. Off plan developers do not like to budge on their pricing as they know they will achieve it, given they wait. With existing flats, there can be an entire host of reasons why the seller is selling – moving away, bereavement, retiring, downsizing, up-scaling, moving area etc. This makes the sale emotional for the seller which gives you power to negotiate. Then you have the valuation which could help you bring the price down. In short, there are a lot of processes which can be in your favour as a buyer.
Also, you will most definitely find a cheaper property with the same rental yields (cheaper property, cheaper rents for now).
If you are buying for investment, you can also find tenants in-situ. Which means that you will receive rental income the second you own the property. As of 2011, 13,426 of those flats are privately rented. That’s roughly more than double of all flats in the CR postcode being used as rental.
Naturally these properties will increase in capital appreciation too.
An Estate Agents view on One Bedroom Flats in the Croydon area.
Walk into any estate agency in Croydon and ask them “what type of property is your DREAM property to rent” I can almost guarantee it would be in this order:
- One Bedroom Flats
- Two Bedroom Flats
- 3 Bedroom Houses
- 3 Bedroom Flats
- 4 & 5 Bedroom Houses
- A Castle.
I know if you came to me saying that you had a 1 bedroom flat in Croydon to rent, I would tell you that I could have it rented or sold by the time you walked out my door. Ok I’m exaggerating a little here, but you get my point. They are the best types of flats for Estate Agents because they rent and sell so so so quickly.
On the note of Estate Agents, it is a wise idea to call one (me!) before you think about buying any type of property. Especially when it comes to investment. Estate agents (especially the local ones – Estate Agents IN CROYDON), will naturally know what rents and sells the best. And they will also know which type of property rents and sells the best. So it would be wise to have a quick chat with me and I will give you all the advise you need on any potential properties you may be looking at. 🙂
Hope this has been useful! Until the next one!