Last week, a couple from the West Hallam area came to
discuss potentially investing in property for Buy to Let. One of the most
important considerations you will make before investing is the balance between
annual return/yield and the annual value increase/capital growth. Mapperley
Lane in West Hallam is a lovely semi-rural spot on the edge of the village. West
Hallam itself is a sought after place to live on the Derby side of Ilkeston.
The average three bedroom semi-detached house currently sells at around £180,000
and rents are roughly £600 or a little more per calendar month.
With this in mind, it was a surprise to find that similar
sized three bedroom semi-detached houses on Beauvale Drive, in Cotmanhay in Ilkeston,
have outperformed those Mapperley Lane, West Hallam.
This is because a
three bedroom semi-detached house on Beauvale Drive can be bought for around £75,000 and the
achievable rents can be around £550 per calendar month
The yield which could be achieved from property on Beauvale
Drive is around 8.8% per year. When we compare this to the possible 4% on Mapperley
Lane, it is 120% higher on Beauvale Drive.
However, we must remember that yield is not the sole
consideration when investing in Buy to Let properties. The average value of a
three bedroom semi-detached house on Beauvale Drive in 1997 was £23,000, which
has since risen by a fantastic 220% in the last 18 years. A three bedroom
semi-detached house on Mapperley Lane in 1997 was £48,000 meaning the value has
increased by an impressive 275% in the same 18 years.
Interestingly we manage properties in both areas - and both
tend to be very popular!
If you would like more information on investing in Winchester’s
property market, please call me or visit our offices.
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