A £400,000 Four-Bed in London: What the Numbers Say

A four-bed flat in London for £400,000 sounds like a typo. This one sits on Streatham High Road, above commercial premises.

Our model shows a 7.4% gross yield and an 11.3% IRR. Inside, you get an Art Deco fireplace, large bay windows and a bathroom from the 1980s.

Torquity rates appeal at 4.5 out of 10 and condition as fair. The dated kitchen and bathroom pull the score down. The building keeps it’s Art Deco character, and the layout fits four bedrooms into 93 m².

Year one looks strong for London. After the mortgage, the flat brings in about £640 a month. Cash-on-cash reaches 5.54%, and DSCR sits at 1.54x. You need around £139,000 of your own money, including purchase costs.

Our model puts rent at £2,477 a month, or £27 per m². The range stretch from £1,190 to £3,765, so confidence stays low.

The estimate looks cautious. Nearby three-bed flats let for £32 to £41 per m². The closest in size, an 87 m² flat on Barcombe Avenue, lets for £2,950.

Four bedrooms suit sharers. If you plan to let to four unrelated tenants, check HMO licensing with Lambeth council first.

Over 10 years, the model shows £285,645 in profit and a 2.74x return on your money. The 14.73% IRR includes the refurbishment. Without it, the IRR stays at 11.30%.

Rent does much of the work here. Still, part of the profit relies on London prices rising. Run a flat-price scenario in Torquity before you make an offer.

The model found ten rentals within 1.3 km, with an average match of 34%. None of them packs four bedrooms into a flat this size.

Three-bed flats of 65 to 87 m² let for £2,500 to £3,400. Four-bed houses of 126 to 144 m² let for £3,200 to £4,350.

One flat on Tierney Road appears twice, at £2,650 and £4,300. The higher figure looks like an outlier, and I would ignore it.

The budget covers every weakness the model flagged: kitchen, bathroom, toilet, floors and the living room mural. The separate toilet helps a lot when four tenants share one bathroom.

The uplift looks ambitious. £3,500 means £38 per m², above most three-bed comps. I would plan for about £3,000 after the works. Even then, the refurb pays for itself in about four years.

As a buy-to-let, it deserves a viewing. A 7.4% gross yield and a 1.54x DSCR leave room for a void or a rate rise. I rarely see that in London.

Visit at different times of day to hear the noise from the units below. Ask about the lease length and service charges too.

Hidden gems

• Four bedrooms for £400,000 in Streatham
• Original Art Deco fireplace and large bay windows
• A rent estimate below most local comps per m²
• A refurb budget that covers every flagged weakness

Pitfalls

• Commercial premises below may bring noise
• One bathroom for four bedrooms
• A wide rent range and no true four-bed flat comparables
• The 42% uplift sits above most comps
• HMO licensing, lease length and service charges need checking