BTL South Norwood?

Hi Kim,

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Hi Kim

You haven't said why you are considering a 4 bed house with a lower rental demand and hence gross yield potential. There could be several reasons, e.g. higher capital growth expectations or equal net rent after factoring in ground rent and service charges. Can you be a bit more specific please?

Also, you haven't said whether you are hoping to buy with cash or with the benefit of mortgage finance to leverage your returns. Again, if you could provide clarification it may assist the discussion and provide an opportunity for people to raise more points for you to consider.
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S Norwood would be higher yield if you HMO'd it up. you can also extend for extra rooms.

Norwood is one of those areas that historically has been cheaper than others around but now has had much regeneration as well as increase in value. I'm not sure how yields would compare ex la flat zone 2-3 vs house in S.Norwood. you're getting tenants in both circumstances that are looking for cheap rent vs other locations/properties. I'm sure they'd be sufficient demand in either location as London outskirts are still a high demand area.

regards Andrew.

ps highest yield would be ex council flat/house in S.Norwood.

Thornton Heath resident here!

I own a 3 bed BTL house in Thornton Heath and it delivers a very good yield.

Sure it is not as desirable as Zone 2, however, with direct trains to Victoria and London Bridge, it is very convenient. Thornton Heath and South Norwood train platforms are very busy during rush hour, which is a good indication of how many London professionals commute from these areas.

So to answer your question, yes I would say they are attractive to renters, as long as you can buy within walking distance to either of the stations.

Also, these areas are sandwiched between Croydon and Streatham, where it is now very difficult to get a good 3 bed in those areas for under £350k, so Thornton Heath or South Norwood have some good bargains for now, but these prices are rising so don’t miss out!

I've been following this discussion with interest, as I know the area VERY well, though I haven't commented yet because I let 1 bed flats, not HMOs, and you're asking for very specific advice.

Coincidentally, I also have a friend who co-inherited a large Victorian house in Selhurst when his parents died 18 months ago. Although his brother is an experienced property investor and landlord, and they're both quite handy, they didn't have the appetite to convert the property and let it out (either as flats or an HMO) so they therefore tried to sell it. It sat there for nearly a year (perhaps it was priced too highly to appeal to developers) - they've just recently managed to let it, although he won't say in what capacity (he doesn't want me "nagging" him!).

Although the house is in good condition, after having elderly people living there, it's not well enough presented and high spec enough to appeal to a single household, and even if it was, although families DO buy those houses, it's not an area that typically appeals to that demographic who also want a desirable area. Another factor to take into account is that the area is in a flood plain and my friend's parents always had problems when it rained heavily.

According to Spareroom, rooms in SE25 let for between £500 - £600 pcm, which is just slightly less than Croydon, but even the fashionable SE19 area isn't as sought after (for rooms) as Zone 2 areas. There are some HMOs around Selhurst, but I'm not sure they would appeal to professionals.

Having said that, the area around Selhurst station is very pleasant, and small flats certainly let very well. I have 1 bed flats not far from there, in much less desirable parts of Croydon and I've got great tenants - young professional couples. The longest they've been with me is over 4 years, and I've never had rent even one day late or any other trouble (other than being politely told about maintenance issues which unfortunately, I've had plenty of...).

To conclude, my advice is if you buy the house, beware of the flooding issue, and convert it into smaller flats rather than HMO.

Croydon Council voted in to introduce borough wide Landlord Licensing but the decision is being referred to the Scrutiny & Strategic Overview Committee‏ next week. There are a group of Croydon Landlords who are also fighting this decision. If you can PM me I can add you to our emailing

Reply to the comment left by "Judith Wordsworth" at "18/03/2015 - 19:29":

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