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Option Homes Ltd - News- What local amenities will influence a property

What local amenities will influence a property`s lettability… and price?

Date Added 23/02/2016

Every market changes over time – and the property market is notoriously fickle. Today`s not spots are tomorrow`s hot spots… and sometimes the flow goes the other way. So how does a landlord use this to their advantage?

Property prices don`t go in a straight line up or down – and that`s just the national or regional trends, which tend to respond to economic data and confidence. Drill down a little deeper and you`ll find that - just like yesterday`s flairs - districts, suburbs even streets, can go in… or out of fashion.

There are lots of reasons why this happens, but the overriding factor is supply and demand, itself influenced by a range of smaller factors – from a local school performing well or badly, through to a local employer taking on or laying off staff, to a new arts centre opening up - and everything in between.

Gentrification is another, longer term, trend to watch out for – often the result of inner city areas becoming too expensive for many people... who then take their property pounds a tube station further out where better value can be had.

Regeneration of a local High Street can have a similar effect on the streets behind… this can be sparked by something as seemingly inconsequential as a fashionable shop or restaurant opening locally. Others follow in their wake and, suddenly, an unfashionable area becomes an edgy one... and finally a chichi one.

Knowing that sort of granular detail is what should make one of the differences between a good local agent one and one that operates nationally and says they`re local. And it is also a key reason why landlords, or anyone considering entering the buy-to-let market, need to take very careful stock of where rental demand is likely to grow – or at the very least, continue. And, of course, popularity will also determine that all-important capital growth factor too.

Location, location, location is always trotted out as the determining factor of a property`s desirability and market price. But never forget that what comprises a good location for a young professional couple isn`t the same as what as a young family is seeking.

And because not everyone is looking for the same thing from a property when letting, landlords have to be very savvy on how they pitch their properties.

We, for instance, have seen a big surge in demand for family homes / two bed apartments etc.

An average sized three-bedroom house in Southgate, for instance, would set you back around £700,000. But the monthly rental would be in the region of £2,000 after costs and maintenance, a net return of around 3.4%. Easy access to a local park as well as the shops, plus a safe location are also desirable, but school catchment areas are the number one priority.

Moreover, families renting in this way are often there for two, three or even more years – saving on the churn you will see with other tenants.

That isn`t to say that there isn`t strong demand from younger tenants wanting terraced houses or apartments: their priorities will include somewhere to enjoy themselves socially: shops, restaurants, cafés, clubs and bars. Access to public transport will also be critical.

Larger houses which can readily be converted into a house with multiple occupants can often offer a level of return as much a 20% higher again – albeit they will demand more landlord/agent input.

So knowing these factors may well mark the cards for any aspiring landlord. But if you are currently a landlord and finding it hard to attract tenants, it could simply be that there is now a mismatch between your property and whom you`re targeting… and what the local market actually wants.

Analysed further, it might even be best to sell up and invest elsewhere. As I began this piece by saying, the property market is fickle: the last thing a landlord wants is to see his ROI diminish because they`ve `stuck` when they should have `twisted`.

If you`d like some in-depth knowledge on where to invest in the Greater London market in order to get your maximum ROI, why not give us a call?
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