By Jonathan Hudson
Who is buying for investment in Fitzrovia?
Many of those who come to us for investment buying are familiar with the area and the benefits it can offer to those who live there. They also recognise the current strength of the lettings market as well as long term sales growth such an investment will provide.
UK based buyers are using their savings or retirement funds to invest, as at the moment it is generally better to invest in property than have that money in the bank. They are investing either as a loan to their offspring to help start them off in their own property, or as a pied a terre or as a pure cash cow for their later years.
There is an ever increasing demand from the overseas investor in particular from Asia; their children are either planning to go to university in London in the future or are already there.
Fitzrovia is considered undervalued and better value for money compared to its neighbouring Marylebone, but it can still boast the W1 postcode. There is currently lots of investment in the area spearheaded by the Crossrail development at Tottenham Court Road and the planned development at the Middlesex Hospital site by Aviva and Exemplar. The area has easy access to all areas of the West End including the universities as well as having great transport links to the City and beyond including the Continent via Eurostar. Also Derwent London and Great Portland Estate are investing heavily in projects in the area.
Fitzrovia is also very firmly established as a prime buy-to-let location mainly due to the relatively high concentration of residential property so close to the major universities and colleges of the area. Buy-to-let investors can benefit from rising rental returns from a wide international tenant base of both professionals and students. The property prices in the area have proved very robust even through economic downturn and therefore represent a good long term investment. This is only part of the story as there is also a big market for corporate lets too with Hudsons Lettings department being inundated with high earning individuals looking for prime stock. Fitzrovia is perfectly located to cater for city workers looking to have a balance of ease of access to work coupled with a great social life on their doorstep.
What are they buying
We are seeing property investments focusing on flats in portered blocks and period conversions. Some buy-to-let investors generally are looking for 1 or 2 bedroom flats with good rental potential and low service charges however, others are looking for high-end buy- to-let investments which are likely to increase greater in capital value, and sometimes these may not show the yields of some smaller units.
Home buyers and second home buyers are also taking in to consideration the rental potentials of properties as part of their decision making process to calculate if it is a good long-term rental investment as well as a home in the short term. Upper floors and portered buildings that act as “lock up and go” properties are always more popular particularly for pied a terres that will not be occupied all of the time and for females living on their own this offers more security
Overseas buyers, in particular Asian buyers like a good specification finish, modern and if possible new build and many are attending trade fairs in their home countries snapping up some of London’s hottest new properties. Some Asian buyers are penalised in their own countries for buying investments there, so London with its reputation as a global hub is seen as a safe bet (due to UK seemingly taking action to pay back its debt and with a view to long term growth). It is also seen as a base for family members to use in the future to capitalise on London’s prominence in the global economy.
Jonathan Hudson is founder of Hudsons Property hudsonsproperty.com