Thursday, 9 March 2017

Are One Bedroom Flats in Warrington Good Investments?

I have written articles before with research on two bedroom flats in Warrington and whether they are sound investments.

At that time, I was approached by a Warrington landlord who had religiously stuck with the same strategy in his time as a Warrington investor – two up two down terraced houses. The research I did at the time was enough to convince Paul to stick to his original strategy with the old adage – if it’s not broken, don’t fix it.

However, I did very little research on one bedroom flats in Warrington, so I thought it would be nice to look at the numbers for an ideal one bedroom investment flat would look like.

Flat Statistics

There are over 21,000 flats in Warrington. This only represents around 7.5% of the housing stock here, with the national average being nearer 17.7%The average price of a one bedroom flat in Warrington is around £85,000, which isn’t a whole lot different compared to two bedroom flats that come in at £95,000.

However if you do the right research, you can find one bedroom flats in Warrington for a very reasonable £60,000. If you were to invest in a flat like this, you can expect a rental income of around £395 per month. Even after paying the service charge, usually around £1000 per year, yields could reach around 6.2% per yearHowever, you must remember that every landlord’s tax and interest rates are different, so it is essential to research your investment carefully before committing.

Now 6.2% is not as attractive as the yields you can achieve on a two bedroom flats – or the 8% plus you can  achieve on a two up two down strategy (without all the extras such as the service and maintenance charges mentioned above).

Capital Growth

Finally, let’s not forget about the potential increase in capital value of the property. I started looking at the history of the one bedroom flats in the Finsbury Close development and found that they sold for around £47,500 at first, and then during the boom in 2006 they sold for around £85,000. This has dropped dramatically since. Over the last 10 years, you can see that the value of these flats has started to reduce and during 2015/16, the average sales are around £63,000 - £70,000.

Potentially, these flats could go back up to similar prices they sold at in 2006 in the future.

As we know, investing in property is not a get rich quick scheme. It takes a lot of time, hard work and much more. The numbers I have used are averages. If you can pick up a nice two bedroom flat in similar developments to Finsbury Close in Warrington for the right price, then you can look forward to some great growth.

As I always tell my landlords – you make your money on the purchase price.

Make sure you’re doing your research daily, as you don’t want to miss that perfect opportunity – and they do crop up in Warrington. 

Email me on or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

No comments:

Post a Comment