Monday 2 May 2016

BUY-TO-LET DEAL OF THE WEEK: 2 bed flat in Chichester, £170,000, 5.5% yield

chichester flat
2 bed flat in Chichester
Listed for sale on 09/03/16 @ £180,000
Now = £170,000
Rent = £775pcm
Yield = 5.5%
Last sold in July 2010 for £139,000 (+22% in 6 years)
With prices of two bedroom houses having jumped recently (the cheapest on the market is £229,950) it will lead many to look instead at flats. Whilst ordinarily I'd always say buy a house rather than a flat, when the price difference between the two becomes this extreme, the slight loss of capital growth and added cost of service charges / ground rent of a flat becomes less of a factor.

At the lower-end of the two bed flat market in Chichester is this apartment in Charles Avenue (a reasonably central location if avoided by many due to its reputation for 'trouble'). It's in a fantastic condition so no money would be needed to be spent, having had a new kitchen and bathroom installed in recent years, whilst the decor is immaculate. The lack of gas central heating can be a deterrent to some tenants, although it's fairly common amongst the apartments in this area and at least the flat has double glazed windows.

Whilst rents for two bedroom apartments in Chichester continue to creep up, I feel you need to be realistic that with two bed flats starting from £750 an achievable rent would be in the order of £775pcm (which is the price one in the block recently let for); still good enough to provide a 5.5% yield.

On the capital growth side of things, at first glance a 22% increase for the current owners in the six years they've owned it seems pretty good. But when you consider they've paid for a new bathroom and kitchen in that time and were fortunate enough to be buying close to the bottom of the market, the gain doesn't look quite as impressive; something I think we will be saying again about these lower-end flats in years to come.

It is on the market with Cubitt & West and full details can be found on Rightmove via the following link:


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Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:


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