Chiswick Estate Agent Issues Buy Call To Investors

Andrew Nunn believes that current yields are too attractive to miss

Andrew Nunn reports accute shortage of properties looking for tenants in W4

The lettings team at leading independent Chiswick estate agents, Andrew Nunn and Associates, believes that now is the time for investors to be looking to acquire in the W4 area.

Mateo Asminian and Katherine McDowall consider that the market is emerging from a challenging period with capital values holding up well and rents on the increase.

They say, "Times like these make us firm believers that, no matter how big or dark the cloud, there is always a silver lining…

"Over the last few years, London landlords have faced a number of challenges in the property market, from Brexit and increased tax changes to the pandemic causing a mass exodus of space-seeking tenants from the city and rents taking a hit.

"The past few months, however, have seen levels of demand skyrocket as offices have re-opened and the increasing ease of travel has allowed a release of pent-up demand – and this may only be the beginning of this trend."

Early indications for the year so far appear to be encouraging with Zoopla reporting that UK rental demand was up 76% in January compared with similar periods between 2018-2021.

This is put down to a lack of stock which is particularly acute in Chiswick. The Andrew Nunn team say there are currently only 100 properties seeking a new tenant in the W4 post code area compared to the more normal levels of 450.

Zoopla have reported London rents increasing by 10.3% year-on-year and reportedly the rises in W4 have been even higher.

This has boosted yields and Andrew Nunn currently have a number of properties listed which they believe should appeal to investors. A flat at St Catherine's Court is on the market for £550,000 and would currently be rented out for £1900 per month which would bring a respectable gross return of 4% However, the estate agent believes that with some improvement work the property could be rented out for £2300 giving a yield of 5% not including the cost of the improvements.

Green Apartments on Chiswick High Road have a sales asking price of £685,000 which would give and investor a gross yield of 4.7% assuming monthly rental income of £2700.

A property on Church Path is being sold for £675,000 which on current estimated rent would yield 4.4%

A flat on Grange Road in Gunnersbury is being offered for £379,950 with a monthly rental income of £1250pcm giving a gross rental yield of 3.9%

These yields are calculated against current asking prices.

The sales market remains two tiered in the view of Andrew Nunn. They say demand for 3+ bedroom, family houses remains robust, withstanding the end of the Stamp Duty Holiday incentive and the more recent impact of rising interest rates, and many are selling at premium prices as a result of multiple bids.

The flat market, on the other hand, will need some patience in its recovery in their view. The strict travel restrictions and the Furlough scheme (and its conclusion) meant a large chunk of first-time buyers and pied-a-terre seekers have been opting against the first/next step on the property ladder. Given these buyers combined account for almost two thirds of flat sales across the board, it is no surprise that there are three times as many flats than houses on the market in W4, and their prices have seen a double digit decline average since the start of the pandemic.

Andrew Nunn reports that garden flats remain strong in demand and sturdy on price, but many of those without outside space depreciated back to their 2014/15 values at the height of the pandemic.

The estate agents says, "This market has shown some signs of improvement since the turn of the year. Buyer registrations for 1&2-bedroom flats are up some 7% year-on-year, and this growth will inevitably improve further in the short term – maybe as early as the second half of this year – as Covid’s impact wanes and we slowly but surely resume our ‘normal’ lives.

"The message is clear: investors, now is the time to buy. The contradicting trends of the lettings and sales markets specifically for flats (which comprise approximately 80% of all rental properties in W4) means yields are at their strongest since the credit crunch in 2008! Buy-to-let mortgages can currently be fixed for as little as 1.09% for 2 years and 1.64% for 5 years. This opportunity might never come around again…"

For further information you can contact Mateo Asminian on 020 8995 1500 or mateo@andrewnunnassociates.co.uk and Katherine McDowall on 020 8995 1600 or katherine@andrewnunnassociates.co.uk.

March 12, 2020