One bedroom or two?

U

uroman

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I am planning to purchase an off plan apartment in London. Have the option of a one bedroom for £225k or 2 bedroom for £290k but can't decide which is better option. My plan is for a medium term hold of between 5-10 years so rental income is a major factor as well as capital appreciation.
Anybody any views or experience on which is the better option?
 
as fas as i know two bedrooms usually trump one beds but it all depends on the size of the second bedroom. would it be big enough to rent out?

the Financial Times ran a big study about two weeks ago examining the price of new build flats in the UK over the past three years. using land registry data (i.e., actual purchase prices) they discovered that new-build flats fell on averge by 1% over the last three years - this is when the rest of the UK property market increased by just over 30%.

this prompts me to ask you where the apprt. is located? £290k for a two-bed probably mean that the area is marginal so you ought to be realistic about the re-sale potential.
 
It's in Greenwich. Looking at the BBC property survey property price rose there 8.1% last year.
 
i live in NW London so I am not too familiar with this area. Look on www.rightmove.co.uk to evaluate rental demand in the area. Don't be afraid to ring a few of the agents listed on that site either. There are bound to be a number of factors that impact prices in that area that only a local would know about.

As for the BBC property survey - my point above still stands - the rising tide has not lifted all boats in this market. Lots of new blocks are majority owned my BTL investors and the lack of owner occupiers in any new block begins to tell after a few years.

If you have the time jump on a plane and spend a day or two visiting properties in the area in order to make a better informed decision.

Good luck
 
the second bed needs to me at least 8.5 ft x 10 ft - have you checked that?
 
No still waiting to receive apartment specs, but i will have a look to make sure it's big enough or else just go for the one bed option
 
Is the difference in price made up for in the difference in rent? Here one bed seems to be roughly €950 and two beds €1200. The only reason someone buys a one bed is because they can't afford a two bed but there maybe plenty of them, I should know, I was one.
 
The yield is usually better on a one bed. Cost of purchase and other related costs are lower. Plus a one bed is usually rented by either one person or a couple who want their own place. Two beds are usually shared and this is a smaller market.
 
Although with the prices involved, more and more are buying with a sibling, friend etc in order to get on the ladder and many FTB's rely on the rent a room scheme, in which case two bed is a better choice. Catch 22.
Sorry just noticed your question related to the UK market so rent scheme may not apply.
 
The OP wants to buy an investment property.
 
One-beds rent better, they are what the market wants in most cities. Apart from lower purchare price, an often-forgotten issue is that furnishing costs are lower too. Go for the one-bed!
 
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