With a recent positive article in the Daily Telegraph about BTL property above shops I wanted to look at an interesting property in Hillingdon on the Uxbridge Road. On with Christopher Nevill in Uxbridge, 2 beds, for £164,950.
What does it have going for it?
- Lots of living space – a kitchen with a range & 22ft Lounge
- Access to strong bus/transport network on the A4020
- Location above a shop
What does it have against?
- Short Lease – 69 years
- No dedicated parking
- Location above a shop
- The A4020 is a busy road. The flat is double glazed to the front and is set back from the road but…
I would argue it’s well priced but with room to negotiate. I would add £15,000 on to the sale price for a lease extension. A 69 year lease will start to worry some mortgage companies as will this flat sitting over shops (and three of them to boot).
To be conservative with the rent at £1000 pcm (and this is a low 2 bed rent in Uxbridge or Hillingdon for oodles of space) and to add the lease extension cost on to your capital cost, the yield would be 6.7%. The average for the area is 5.3%. Of course you haven’t started to get that rent higher or negotiated on the price for your trouble with the lease extension.
People are going to be put off by the proximity to the road and the parking, but if the property is attractive enough, and it looks good, you will get tenants. For these reasons void periods and selling times can be longer with flats over shops, which should be reflected in the price to purchase. For this reason when let, yields are attractive.
