Chichester Property News: Five reasons flats are better than houses

Thursday, 29 November 2018

Five reasons flats are better than houses

Last week I looked at why houses were better than flats. But with 53% of the properties available to rent in Chichester being flats, it seems it’s a matter that’s split down the middle when it comes to landlords’ buying preferences. So, with that in mind, here are five reasons why some will prefer letting flats rather than houses.

1) Price
Perhaps the biggest advantage is in regards to price. Flats can be made smaller (and thus cheaper) than houses, whilst they are also typically cheaper than an equivalent-sized house. For example, the cheapest two-bedroom flat for sale in Chichester is currently £180,000, whilst the cheapest two-bedroom house is £239,950. For many landlords, their budget alone will dictate that they should buy a flat rather than a house.

2) Rental return
Typically you’ll find that as you spend more on a property the rent won’t increase at the same rate and thus the rental return will decrease. And so it is in the case of flats vs houses, whereby Chichester’s houses average a rental return of 3.3% (average sale price = £395,000 / average rental price = £1,100pcm), whilst the flats in Chichester average 3.6% (average sale price = £282,500 / average rental price = £850).

3) (Some) maintenance covered
Last week I highlighted the service charges that flat owners pay as being a negative. The upside is, however, that these charges will cover certain costs of ownership. Typically these will include buildings insurance plus external and communal maintenance issues. A house owner’s roof for example is entirely their own and any repairs will be fully at their cost. With a flat however, expensive works like these will be split amongst all owners (although a ground floor flat may wonder why they’re paying for roof or lift repairs).

4) Tenant demand
As flats are typically cheaper, you tend to find a wider pool of tenants searching for them. You’ll often find young first-time tenants will automatically look towards a flat as they aren’t interested in maintaining a garden and don’t mind sharing communal facilities. An aging population might also mean that ground floor flats, or those in a complex with a lift, become popular in the future, compared to houses with stairs.

5) Security
This is only really a consideration when the property is vacant, but flats are often bought by landlords who want something they can ‘lock up and leave’. As well as not having a garden to maintain, a flat is often more secure as it will be in a block with added security and common areas with neighbours moving about.

Overall then are flats or houses better? Well, like a lot of questions when it comes to property investment…it depends on you and your circumstances. If you’re thinking of investing and would like a friendly chat about my experiences as a landlord/letting agent, feel free to get in touch.

(This article was featured in the Chichester Observer's property section on November 30, 2018)

Clive Janes, CRJ Lettings

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