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Millbank Estate, Erasmus Street, London SW1P
City Of Westminster
Built in the late 1800’s it was influenced by the arts and crafts movement and also the Queen Anne style of architecture
550 flats across 15 Houses
Millbank Estate is extremely well located for access to the rail/tube links of St James’ Park, Westminster Pimlico and Victoria.
Millbank Estate, an Overview
Originally developed as social housing in the late 19th Century, the Millbank Estate has – through former Prime Minister, Margret Thatcher’s Right-to-Buy scheme – become a hugely popular, desirable property investment appealing in particular to but-to-let investors or owner occupiers looking for a [relatively] cheap London pad.
Millbank Estate is located immediately behind Tate Britain and just on the fringes of Westminster’s Parliamentary District. All of London is easily accessible from this area with Pimlico Underground Station being only a few minute’s walk away and many of London’s key attractions are also within walking distance.
Purchasing within the Millbank Estate offers an excellent opportunity to own a piece of solid London housing stock that remains forever covetable.
A History of Millbank Estate
From its very conception, Millbank Estate was always intended to be an exemplary form of social housing. Built in the late 1800’s it was influenced by the arts and crafts movement and also the Queen Anne style of architecture, with a central courtyard or garden and the distinct red brick being such features that were more like the private mansion blocks of Victoria and Chelsea.
Made of 15 houses the development initially housed over 4000 tenants but due to remodelling after the Second World War it was rationalised into about 550 fully self-contained flats. An integral part of the Millbank Conservation Area, Millbank Estate is situated directly behind Tate Britain and appropriately the estates 15 houses are each named after a notable British Artist including; Ruskin, Turner, Gainsborough and Stubbs.
Tate Britain itself was built around the same time as the estate. The gallery, a gift from Sir Henry Tate, was originally known as ‘The National Gallery of British Art’ and was built to house the nation’s paintings including a substantial collection of works by JMW Turner. However, even from the outset the gallery was popularly known as ‘The Tate’ and so was renamed in honour of its benefactor.
To the south east of Millbank Estate and next door to Tate Britain, is the former Royal Army Medical Corps and Millbank Barracks with its open parade ground. This has now been taken over by the University of the Arts London and is home to Chelsea College of Art & Design. With the parade ground being left open, the college hosts a number of public exhibitions and events as well as having a small public café and art supplies shop.
Collectively the Millbank Conservation Area is a lovely example of late 19th Century Architecture with a considered, thoughtful layout that has a mix of public and private spaces. The public garden at the front of the estate is beautifully maintained and is a popular yet peaceful spot for the local office workers to enjoy lunch al fresco.
Living & Investing In Millbank Estate
Admittedly the Millbank Estate is not for everyone. Council tenants still make up 40% of the residents which may deter some people and yet its management team are an award winning body and the gardens and communal areas are kept spick and span.
Grade II listed, all of the flats within the Millbank Estate are of generous proportions and are of traditional, functional layouts that appeal to people who like cosy intimate spaces rather than open-plan apartments.
The estate represents an opportunity for the intelligent investor with flats suitable and sizable enough for couple, families and professional sharers. The nearby university means affluent students should certainly be considered by landlords, parents too might consider this a wise investment for their children looking to get on the property ladder. Owner occupiers can be assured that the strong Tenant Management Organisation (TMO) and overall community feel means that the estate remains clean and peaceful. This writer can personally vouch to the quiet pleasantness of the blocks, having visited friends on the estate and also through having previously lived in the area for a number of years.
Millbank Estate & Beyond
Aside from the Tate Britain, (This incidentally has a river pier with ferry service taking passengers up to Tate Modern.) London is surely one of the most artistically diverse cities and with the Millbank Estates artistic monikers, it is worth exploring what ones of the world’s greatest capital’s has to offer the art loving property owner.
Cork Street, St James and Mayfair all have a number of well-renowned fine art dealers offering a wide range of specialism’s from ancient Islamic and Oriental art, to Russian fin de siècle and 19th century British. The East End of London is well-established as the go to district for contemporary art, and reportedly boasts over 50 galleries within a single square mile. Across the river, and within walking distance of the Millbank Estate, Damien Hirst has opened his own gallery in Vauxhall and Jay Joplin’s White Cube Gallery now has a major space on Bermondsey Street. Also on Bermondsey Street, fashion lovers will love the bright orange and pink building that is the esoteric Fashion and Textiles Museum founded by eccentric, 1960’s fashion designer, Zandra Rhodes.
While Chelsea College of Art & Design has its main campus opposite The Millbank Estate, The University of The Arts London, which Chelsea is part of, is made up of six of arguably the world’s best art educational establishments. Scattered across London, each University or College boasts notable alumni such as; Gilbert & George, Alexander McQueen, Neville Brody, Stella McCartney and Anish Kapoor. Therefore it is seriously worth begging, borrowing or stealing an invitation to the end of year shows that each College hosts if you want to find out who the next hottest artists and designers are going to be.
Finally, while going on the art and fashion trial, residents on the Millbank Estate might also like to track down examples of work and statues dedicated to the namesake of their home. The national gallery and Tate Britain, both rather obviously own works by each of the artists that the Millbank Estate is named after but there are many less well-known works and monuments recognising these great artists dotted about London. We suggest starting with the statue of Millais in the grounds of Tate Britain and then heading to see statues of both Reynolds and Hogarth in Leicester Square. From there the rest is for you to discover….
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What yield can I expect from a Millbank Estate rental property?
The buy-to-let market in Westminster will provide investors with healthy returns for as long as tenants choose to live in high quality homes within easy reach of Victoria’s ever-expanding retail facilities Pimlico, Westminster and St James’s Park Underground Stations.
This is despite the government introducing a 3% stamp duty surcharge on second homes, which pushes the tax payable on a £550,000 apartment in a Grade II-listed mansion blocks in Millbank from £17,500 to £34,000.
To calculate the level of return an investment property in this well-maintained red brick development will deliver, landlords need to calculate the rental yield – the rental return as a percentage figure of the property purchase price.
LendInvest reports that rental yields between 2010 and 2016 in the whole of the SW postcode was 4.8%, but this is based on landlords receiving £19,500 per year in rent.
To calculate your buy-to-let investment’s rental yield, take the total rent received over a year. Considering the estate’s 562 flats are moments from the Tate Gallery and the Chelsea College of Arts, it is not unreasonable to let one-bed properties here for £1500 per calendar month, which would work out to be £18,000 per year.
Next, take the purchase price of the property (£550,000) and add that figure to its buying costs (£34,000 stamp duty plus £2000 professional services fees). That gives you a total of £586,000.
Now perform the following calculation: 18000 ÷ 586000 x 100 = 3.07%. While this is lower than the pre-stamp duty increase figure of 4.8% it is still far higher than savings rates available on the high street.
However, the above calculation assumes the investment property on the Millbank Estate, which has been refurbished to a high standard, was purchased without the need for a mortgage.
To work out your annual return or yield taking the property loan into account, the annual mortgage costs must be subtracted from the £18,000 received in rent.
Let’s assume the investor takes out an interest-only buy-to-let mortgage for 80% of the purchase cost (£440,000) at a rate of 3%. That would result in monthly payments of £1099 or £13,188 per year.
Subtracting that figure from the annual rent receipts of £18,000 leaves a healthy pre-tax profit of £4,812 per year.
To calculate the yield, take the deposit put down (£110,000) and add that figure to the stamp duty and other buying costs (£36,000). This gives a total of £146,000.
Now perform the following calculation: 4812 ÷ 146000 x 100 = 3.29%
A quick glance at the best savings rates available on easy access accounts, reveals no more than 1.3% is currently available. Not only that, the value of property in Westminster is likely to appreciate in value if the investment is held for 10 years or more.
It is wise to bear in mind, however, that a landlord’s true income from a buy-to-let investment is the amount of rent left over after all the other expenses associated with the property have been met. These can include variables such as void periods, maintenance, insurance and the fees charged by letting agents.
But even subtracting 25% from the £18,000 annual pre-tax profit gives a yield of 2.47%.
As well as Tate Britain, Millbank is known for its large number of parliamentary offices, most notably Number 7 which was built as the headquarters of British American Tobacco.
Neighbourhood restaurants and bars are found in Pimlico – including the highly rated Cask pub – while Albert Embankment (on the edge of the capital’s new diplomatic quarter) provides Millbank’s residential and business community with a choice of local amenities.
Garton Jones has received a large number of enquiries about properties in and around the Millbank Estate from both buyers and tenants. If you want to sell or let your property in Westminster, use the form to contact us today.
Every buy-to-let investment can deliver a different yield depending on the cost of the property, the size of the deposit put down and the rent charged. For this reason, the figures quoted above are for illustration only.