Our monthly ‘Advice Clinic’ series shares the answers to questions our landlords have been asking. This month, Marc von Grundherr, Lettings Director, looks at the value in having a parking space.
Parking spaces in London are like gold dust. The city’s streets are lined with cars and there is nothing worse than arriving home after a long journey and being unable to park anywhere near home.
It will come as no surprise then that such a rare commodity does not come cheap. In Knightsbridge, homeowners could spend as much as £300,000 for a single parking space (and that’s before paying the annual service charge which can be as much as £5,000 per annum).
And, of course, in many areas of London, you can only park in a property development if you own or rent both a parking space and the property. If you don’t have a parking space then you will not be able to park on the streets surrounding the development either because councils will not issue permits to development residents in some boroughs. This can come as quite a shock.
This does depend to some extent on what type of tenant the landlord is looking to attract, however we usually advise investors to buy a parking space if there is an option to do so as it gives them greater flexibility on who to rent to. If you don’t have a parking space then someone who uses a car will not consider your flat. Equally, if you have parking then the property is suited to tenants whether they have a car or not.
It is not just for the rental opportunities that a space becomes important either. With an eye on the exit, properties with parking do tend to sell more easily and help you recoup the cost of the parking.
Over 60% of apartments with three bedrooms or more absolutely must have a parking space; many tenants won’t even consider a property that doesn’t have one. Corporate tenants in particular tend to consider them a necessity (often as they get given a company car as part of their package) as does anyone who works outside London. The tenant may travel a lot with their work and understandably be unwilling to put up with the hassle of finding a space at the end of a long day. Because of these reasons, not having a parking space may reduce the number of enquiries the landlord receives when their property goes on the rental market.
A tenant who doesn’t own a car clearly won’t consider a parking space to be an advantage but the landlord could rent it out separately if the current tenant has no need for it – they would have to ask permission from the freeholder though. Even if the parking space is unused most of the time, it will enhance the value of their rental property when the landlord comes to sell.
A parking space probably won’t allow a landlord to increase the asking rental of their property, but it may mean it appeals to more applicants and will therefore let more quickly.
Clearly, the price of a parking space will vary according to its location. As I mentioned earlier, a space in Knightsbridge could set someone back over £300,000. The cost of a parking space in Beaufort Park, Colindale is a rather more modest £15,000 while at the Fulham Reach development, which is closer to central London, the cost is £75,000. These spaces are not allocated but they are guaranteed as part of developer St George’s ‘Right to Park’ scheme.
If a rental property doesn’t have its own parking space and there is no option to buy one, the landlord could suggest alternatives to car ownership. Some developments, such as Fulham Reach, have their own car clubs where residents can hire a car by the hour, the day or the week. Residents of Sovereign Court in Hammersmith can obtain a licence to rent a car from a car park operator – these are good options for tenants who only use a car occasionally. Another alternative which is becoming increasingly popular amongst tenants is to cycle to work, eliminating the need for a parking space. Many property developments across London are now offering cycle facilities including bays and bike sheds to meet this new demand. We will be revisiting this subject in more detail in our October Advice Clinic blog.
In a competitive rental market, landlords should do all they can to make sure their rental property ticks all of a tenant’s boxes to ensure it lets quickly. Even in a large city, many of us are relying on our cars more and more, a trend which is unlikely to slow down. With this in mind, we would suggest that if the landlord can afford to, buying a parking space is a good investment and likely to reap dividends in the long term. In conclusion, our advice is to always buy a space wherever possible, however small the unit.
To find out more about rental properties with parking, you can post a comment below or email us.
View all posts by Marc von Grundherr