PROPERTY: 8% rental yield, 23% discount, £150k
Looking for your next big property investment? We’ve chosen this as our Property of the Week as this London property offers an 8% rental yield and is on the market for a 23% discount. It also offers buyers an attractive exit strategy.
Why is this property discounted?
Because it's on a Compulsory Purchase Order (CPO) from the local authority. Currently on the market for £150,000, without a CPO it would be worth around £195,000. If the local authority exercises the CPO for this property they would buy it from a BTL owner at 7.5% over the market value - £209,625 in the current market.
If the order is lifted, the property would assume its true market value. While you were waiting for this to happen you could rent it out or live in it at a 23% discount, giving buyers a shrewd exit strategy.
CPOs allow public bodies to force homeowners to sell up if their property obstructs a regeneration project or is for the ‘greater public good’. However, the authority cannot force homeowners to sell. They are simply applying to a government department to impose the powers to force a sale, which can take years. Agencies are required to pay the current market value of the property in the absence of a regeneration scheme.
RICS has a comprehensive guide to CPOs on its website, which can be found here.
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Wheelers Cross, Barking, £150,000
Further details:
CASH BUYERS ONLY DUE TO CPO FROM THE LOCAL COUNCIL
One bedroom, second floor flat for sale. The property has one double bedroom, lounge, kitchen and family bathroom. All rooms are spacious and have been kept in good condition. Benefits include gas central heating (untested), double glazing, security entry system, communal parking and gardens. It is also chain free.
Entrance: Via communal entrance door with security entry phone, communal hallway and stairs to:
First Floor Landing: Private entrance door to:
Hallway: Radiator, two storage cupboards, laminate flooring.
Reception Room: Double glazed window, radiator, laminate flooring.
Kitchen: Double glazed window to flank, wall and base units incorporating stainless steel single drainer sink unit with mixer tap, space for gas cooker, cooker hood above, space for appliances, radiator, tiled walls, part-tiled floor.
Bedroom: Double glazed window to flank, radiator.
Bathroom/WC: Opaque double glazed window, white suite comprising panelled bath with electric shower above, wash hand basin and low level WC, radiator, tiled walls and floor.
Exterior: Communal Gardens.