I was at a networking event this morning meeting new people as you do and bumped into one of my lovely local neighbours (hello Paul!). He lives in The Square in Watford, as do I, and we were discussing what a lovely little micro-community it was. It’s not an area you would necessarily know about as it’s a one way system that leads from Vicarage Road back to Vicarage Road. And
unless you own or rent property in The Square you would never need to go there. Most of the houses are now protected as it’s a conservation area and my neighbour asked me whether that made any difference to house prices and whether it was a good area to invest. If you’ve read my articles before you’ll know I love a good question like this so thought I’d have a look into it!
The Square is made up of 4 Streets: Oxford, Aynho, Souldern and Banbury. Nearly of the housing stock in this area is terraced houses but there are a few flats conversions. There are approximately 176 properties in the area and the average value according to Zoopla is £246,824 although I know that the terraces in this area are selling for more so I think Zoopla hasn’t quite caught up yet! I’d say the average sale price is probably now closer to £275,000 especially as 3 houses are current sold stc for between £279,000-282,000. Oxford Street on average is the most expensive followed by
Souldern then Banbury and Aynho and this probably reflects the size of the houses on each street.
Prices in The Square have increase on average by 12.74% in the last year and 27% over the last 5 years so if you are looking for an area which has the potential to give you good capital growth then this could be it. One lucky (or shrewd) investor recently bought on Banbury street in Jan’12 for £202,500 and then sold again for £257,000 in July this year. Now that’s a tidy profit and I’m sure they will have got some rent for it in between to add to that profit. I don’t know if this particular house was refurbished or extended and if you are thinking of doing the same on The Square there are a lot of restrictions on permitted development so check with the planning dept before you buy!
Considering the average rent in The Square is somewhere in the region of £1150 for a well presented terrace we can work out the average yield to be just over 5% which is a good yield for the area.
As it’s such a lovely little area and has a great community it attracts friendly homeowners and tenants alike. Good tenants mean a well looked after investment property and whilst we don’t take this into account in our figures a well looked after property lived in by tenants that pay the rent on time every month can make a significant difference to your net return on investment.
I think you could do a lot worse than to buy on one of these streets. If you can get anything near the stamp duty threshold or just under I would suggest it’s a good buy. Perhaps a fixer-upper will pop up at some point as a fair few of them need some work.
If you would like a second opinion on a local area you are considering for investment then give me a call on 01923 375 300 or email james@caleyandco.com