Target: Battersea Investment (SW8)


Battersea investment opportunity providing an investor strong upside via additional bedroom creation.


  • Battersea investment Price: Currently marketed at a £585k guide price. Hmm, this pricing is debatable. Given a combination of the fact that this property has been listed for some time without any price reduction from the seemingly non-desperate seller, the strength of the Battersea area with strong growth prospects boosted by ongoing regeneration and prospective Northern line extension, a sensible sale price is forecast to be around the £525k mark.
  • London Property Analyst asserts that buyers have so far underestimated this property by taking it on face value – a two bedroom period flat at 585k is more expensive than other 2 bedroom flats on Queenstown Road. However, there is hidden value potential in this Battersea Investment. If you were to bid at the £525k level, we assert that this price ought to be agreeable to the seller and leaves considerable value arbitrage in the immediate to short term IF developments are made to the property.
  • Strategy: We recommend that you employ a development strategy here by exploiting the sheer square footage available in your demise and splitting the flat into either a 3-bedroom or 4-bedroom flat, followed by either a BTL refinancing or sale. We would recommend ideally a BTL refinancing at first to extract as much value as possible with a subsequent sale at a time when both the market has regained seller strength and more progression has been made in the overall Battersea regeneration. The value creation forecast at that point is a minimum of 200k, which makes this a strong Battersea Investment.

    Investment highlights:

  • Square footage: At 1,000 square feet of property, you can swing a lion in this period flat. Additionally, at a purchase price of c.£525k, the implied £525 per square foot for this period property beats other similar period style flats on the same street, which are being marketed at a range of £800 – £1,000 per square foot; we believe these are being sold at a range of £750 – £950 per square foot. The critical question is why is there such a large difference between this price range and this particular property? See the Investment Risks section below.
  • Share of freehold status: A decent positive factor providing you with more control over the building expenses. The service charge is unlikely to be anywhere near the level of new build flats or other period buildings with management companies in place, thus conservatively expect up to a c.£1,000 cost per year. Such a cost at this level is still relatively good value and provides for a building sinking fund (utilised for when those awkward building façade repair / refurbishment works come knocking later down the line). Also, to note that prospective works will typically be much easier to negotiate with neighbours with similar share of freehold title.
  • Cost-effective development: This depends on the prospective work you undertake and how effectively you execute it. Londonpropertyanalyst believe that value can be created via two clear cut options. See below for option 1, which illustrates a quick and novice-friendly conversion from a 2-bedroom to a 3-bedroom flat. This conversion will help add value to the flat, which we project to £600k, and will increase the rental potential from £375 per week to at least £450 per week. (But what about Option 2, which we note is more expensive but a further value creator? Click here for Option 2)

Battersea investment

  • Battersea investment Strong development area: Londonpropertyanalyst is an ardent believer in Battersea as one of the exceptional future price growth spots in London for investment; BUY. The regeneration of the Battersea power station (or the ‘big upside down table’, depending on how you perceive this historic structure) and the expansion of the Northern line to Nine Elms / Battersea (click here to read more) justify strong development prospects. In addition and to some extent less ostensibly, the influx of new demand from nearby Chelsea movers who are essentially priced out from their existing Prime Central London homes (due to overwhelming international demand causing this displacement), will continue to fuel further gentrification. Prices have already been escalating at a fast pace over the past two years. If there are residual concerns about the current level of London’s property in the market, we firmly assert that there is still plenty of room to grow for Battersea. We forecast Battersea period property values to push over £1,000 per square foot comfortably by 2017. Do note that properties on the most desired streets, such as Prince of Wales Drive (which is filled with eye-catching red brick mansion blocks and adjacent to Battersea park), Lurline Gardens and Warriner Gardens, are already being priced over and around the £1,000 per square foot level and will grow to an even higher level. However, the real value gems to target are in Queenstown Road and the Shaftsbury Estate conservation area; both of which are filled with period property, in strong neighbourhoods with a community feel, close proximity to transport links and set to benefit from the overall regeneration.
  • Battersea Park: The general rule of thumb is that some of the most desired properties in London are in close proximity to parks and particularly for those close to reputable parks; Regents Park, Hyde Park, St James’ Park, Hampstead Heath, Greenwich Park, Victoria Park (less notable but improving). This property is within a 5 minute walk of Battersea Park.
  • For a decent guide to Battersea, click here (Although we do hope that there is an update soon given the changes happening in the area)

Investment Risks:

  • Railway proximity: This is the downside. Outside one of the terraces, there is a view of the train lines. However, we do not see this a strong enough investment risk. Unfortunately, Londoners have to make peace with this over time given general overcrowding like they have made peace with basement flats and flats above commercial premises. The rail line is something common in Battersea with many properties exposed to this in the surrounding area. So, does that make it a problem shared is a problem spared? Not quite, but the value decrease for this factor should not be overestimated.
  • Floor level: The flat is split across two floors (which we believe is definitely a bonus) on the 2nd and 3rd floor. However, this means that the property is less appealing to a proportion of the general market, particularly those wishing to settle down and start a family (given their preference for the ground floor or accessible lifts). However, we take comfort from the rental market potential with young professionals expected to fill this void; who we hope are typically able to climb stairs and will retain that capability going forward!

Click here to see the detailed financial analysis of this investment and the key financial structuring elements for this Battersea Investment. This section is key and will ultimately dictate your project returns. We assume option 1 is chosen in the building work in an effort to make this analysis useful to the novice developer

Click here for a link to the property


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Contact manager@londonpropertyanalyst.co.uk to see how LPA’s bespoke property consulting services can help you achieve successful acquisitions in the highly competitive and lucrative London property market


Target: Whitechapel Investment (E1)


Whitechapel investment opportunity providing an investor excellent investment returns via flat split strategy.


whitechapel investmentPrice: Currently marketed at £900k guide price. Given current market conditions, strength of both the individual property and area, sale price expected to be closely in line with the marketed price. This still leaves plenty of arbitrage opportunity if you are a proactive investor.

Strategy: We recommend the development strategy by splitting this Whitechapel investment into 3 flats, adjust to Buy to let financings followed by a potential hold into the long run after investment funds are extracted or sale at a later date. You may choose to simply purchase on speculation grounds to be more hands off but this property has room for intrinsic value creation for the greatest gain. Post-development, you may choose to hold the individual flats given funds have been cleverly extracted as part of the refinancings onto healthy by to let leverage ratios (75% LTVs) and wait for full price growth increase over the coming circa 5 years since these assets will provide a healthy cash flow going forward.


Investment highlights:

  • Size: Excellent property size at nearly 1800 square feet leaving open multiple investment strategies. If you acquired at £900k, buying at £513 per square foot, which is comparatively cheaper than current marketed and sales prices in the area.whitechapel investment
  • Freehold status: This provides greater flexibility. There is one less approval for works to be done (freeholder consent) and plenty of precedents in both Newark Street and surrounding streets in the area of building work, particularly flat splits, which ought to provide comfort with a greater likelihood of council approval for the works and from a feasibility standpoint for this Whitechapel investment.
  • Up and coming development area: Whitechapel and the Aldgate triangle are simply excellent locations in terms of ongoing development, with prices having soared in the last year to two years. Further price increases expected to be driven by Whitechapel’s Crossrail Central station (recent report states at greater than 50% over the coming 5 years, read here).
  • Strong and improving transport links: Whitechapel, Aldgate East, Aldgate and Shadwell stations nearby allowing for fast access to Canary Wharf and the city, as well as the aforementioned Crossrail. Highly desirable for young working professionals, which is further expected to drive rents upwards going forward as the rental market is pushed out of more expensive central locations
  • Adjusting social dynamics: The East London stigma has almost evaporated and now viewed as a trendy, up and coming part of town, particularly to the younger generations and working professionals wanting places to go out. The ongoing real estate developments, influx of more affluent individuals and working professionals (with associated retail adjustments to accommodate for such groups – the Starbucks test), the area is swiftly gentrifying and will soon be largely unrecognisable compared to 5 years ago let alone 10 or 20 years ago.
  • Londonpropertyanalyst is investment focused and there are plenty of reports and websites dedicated to providing area guides; we recommend this one for a good overview to help you decide with regards to this Whitechapel investment.whitechapel investment

Investment Risks:

  • Relatively high cost project: This Whitechapel investment project is not for the fainthearted. It is not applicable to the novice unless you hold substantial cash to cover void periods and generally stomach a longer development process driven by inexperience to act on this property quickly. This project needs someone hands on and capable in managing multiple parties for efficient execution for greatest investment success.
  • Development cost: You need liquidity for this project as well as good access to debt financing. The approvals process will take time for a flat split. Be mindful not to underestimate the cost of this flat split (though the floorplan is relatively amenable to a split), the development costs rack up with new kitchens, bathrooms, walls, electric meters, boilers, two relatively small extensions into the garden (to ideally meet the minimum 500 sq ft per flat Gross Internal Area (GIA) to constitute a legal 1 bedroom flat spread across 1 floor. There will be legal work in addition to create three new leases and negotiation with the existing lender to split the debt financing into 3 flats or a new lender for refinancing purposes.
  • Youthful area transition: We mean that the gentrification is occurring and although not in its infancy stages, Whitechapel is still improving area with crime stats upheld by some, resulting in a more risky area versus the majority of other London boroughs. Large number of social housing units and ex council heavens are somewhat of an eyesore and will prove to be a stumbling block to being attractive to majority of market. We view that this trend is changing given minimum social housing requirements in each borough, more social housing become owner occupied following private sales, and people adjusting expectations downwards to the quality of neighbours they can always live next to. Social housing tenants may have been NIMBY but not so NIMBY anymore.

A good result to net a £50k cash outflow, generate c.£1,500 on a pre-tax cash flow basis per month and own three flats in a strong up and coming area with a £1.4 million asset value and healthy 75% LTV on the books. How? Click here to view a Detailed Financial Analysis on this Whitechapel investment.

Click here to see a Link to property


London Property Analyst provides Expert Consulting Services

Contact manager@londonpropertyanalyst.co.uk to see how LPA’s bespoke property consulting services can help you achieve successful acquisitions in the highly competitive and lucrative London property market