Thursday, 21 August 2014
Ilkeston v Heanor v Eastwood v Belper property values – which town has performed the best?
One topic that I am always asked about, both by existing landlords and new ones, is how one towns’ property values have performed against another. When purchasing a buy to let property, there are two ways landlords make money through property letting - capital growth and rental income growth.
When a property increases in value over time, it is known as 'capital growth'. Capital growth, also known as capital appreciation, has been strong in recent times in both Amber Valley and Derby to Erewash areas but the value of property does go up as well as down, and of course the local conditions surrounding your property have a big effect. Rental income is what the tenant pays you - hopefully this will grow over time too. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return.
A landlord from West Hallam who has a number of properties in both Amber Valley and Erewash, asked me a few weeks ago about the difference between the Ilkeston, Heanor, Eastwood and Belper housing markets. I was quite surprised with my findings and wanted to share them with you.
The average property price in Ilkeston is currently £143,400. In the last 3 months property values in Ilkeston, according to my calculations, have risen by just over 3% which starts to claw back the losses we experienced in the latter half of 2011 when values dipped by nearly 6% in the town. However, irrespective of the roller coaster prices that we have seen in the Ilkeston, they are still 15.4% higher than the 2009 slump (before you get the party hats on, we still have 6% to go before we reach the 2007 peak!).
Looking across the rest of the area property values in Heanor have risen by 3.5% taking an average property up to £137,100, whilst Eastwood has seen property values rise by £3,200, taking an average property up to £117,000, a rise of 2.8%. Finally, Belper has seen the highest monetary value increase with an average property rising by £6,000 in the last 3 months, but as average property values in Belper were quite high to begin with, this is only a 2.9% increase in the last 3 months (an average property in Belper presently being worth £209,700).
Each Ilkeston, Heanor, Eastwood and Belper landlord will have different needs and requirements in his or her property investment. We don't sell property, so are able to give an objective and unbiased opinion on what (and what doesn't) make a good property investment. Knowing what has happened to values in different towns, enables us to spot any trends or opportunities for buy to let landlords. If you would like to discuss my thoughts on the rental markets, feel free send me an email to email@example.com or telephone me on 01332 910499