Thursday, 12 June 2014

Do detached properties in the Ashford Rise area of Belper make good investments for Buy to Let?


 
I was talking to someone who lives in one of those modern 4 bed detached houses on the Ashford Rise estate, to the north of Belper on the way to Heage. The whole area was primarily developed in the 1990’s and 2000’s and offers mostly larger executive detached houses and also a few modern semis and town houses. Interestingly though, of the 3,154 properties in the area over 1,868 of them are detached, or approx 59%, compared to 36% average in Amber Valley area. Something that wouldn’t happen today with the price of land.

Anyway, he wanted to buy a property in the immediate area to let out, as he has lived there for over 8 years and felt comfortable investing around there as he knew it well. It would be his first Buy to Let property and had noticed our previous articles, so was interested in learning more about the industry so we started to discuss the local property market.

There were only 245 rented houses in his area of 3,154 properties, making the one of the lowest percentage areas for private renting I have ever seen (7.8% compared to the Amber Valley average of 10.7%, which is still below the national average of 15.3%).

Whilst he lived in one himself, the investment potential of those larger 4 beds wasn’t good, as the highest yield they could expect was only around 3.4% per year. However, the larger 4 beds on the Ashford Rise estate have certainly increased in value at a faster rate than others in Belper (123.5% since 2001, compared to the Belper average of 106%).

Investing in property is a balance between decent capital growth and decent yield. 3 bed semi detached houses on the same development, can be bought for around £130,000 and they rent for around £550 per month, a reasonable yield of 5% per year, and those have increased by on average 116% since the Millennium. A good balance I think you will agree?

It all comes down to personal choice. I have done the same exercise in Ilkeston, Eastwood and Heanor and we get almost the same results. Each landlord has different priorities for their buy to let investments. As I don’t sell property, I can look at the whole of the market and if you want to pick my brains on what would make the best buy to let investment for you, feel free to contact me by emailing me on lettings@sprucetree.co.uk or ringing me on 01332 910499

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