A landlord I know was interested in properties on Nailers
Way, in Belper. She came in to our office to discuss the value of property
suitable for renting on the street and how this has changed over time in terms of
the yields one can achieve.
Looking back over the last 10 years, between 2005 and 2007,
before the 2008 slowdown, 2 bed terraced and semi-detached houses tended to
sell from around £95,000 depending on aspect, condition, whether mid-terraced
or not and so on.
Interestingly, between 2011 and 2012, these properties were
still selling on average at around £110,000, showing good resilience following
on from 2008. Fast forwarding to 2015 however, we can see that 2 bed properties
in the immediate area are still tending to push the £125,000 stamp duty
threshold, and beyond when looking at newly built properties. Certainly, it
seems, she could have done reasonably well in terms of capital growth if she
had invested in this area.
We then looked at the rents over the ten years since 2005.
In 2005 the average rent for 2 beds was £450 per month, a return of around
5.5%. Looking at the average rents for 2 beds in 2010, they had increased a
little to between £475 and £500 per month. Now, in 2015, rents again have edged
upwards and are upto £525 per month, giving a return of around 5.3% per month,
which is steady in light of the capital growth also shown by these properties.
If you would like some advice with your potential
investment, please come and see us in our offices.
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