A couple from Gloucester came to our office to discuss potentially
investing in property for Buy to Let in Cheltenham after reading the ‘Cheltenham and Gloucester Property Blog’. I reminded them
that one of the most important considerations you will have to make before
investing is considering the balance between annual return/yield and the annual
value increase/capital growth of the property that you buy.
One of the
most sought after places to live in is Charlton Kings on the South Easterly
side of Cheltenham . There are 4,463 households
in Charlton Kings and an impressive 3,715 of those households (83.2%) are owner
occupied, yet only 435 of those households (or 9.7%) are privately rented. Charlton
Kings is a very popular area with buyers and tenants alike. The average value of a property is £406,000
and the average rent is £1,036 pcm (this equates to an average yield is 3.06%
per year). Interestingly, the majority
of properties sold in Charlton Kings over the last 12 months were detached
properties selling for an average price of £666,300, whilst semi-detached
properties sold for an average of £306,300 and terraced houses achieved an
average price of £253,500. Whaddon on
the other hand is a different story altogether. Only 1,273 of the 2,443 Whaddon
households are home owners (52.1%) and surprising only 244 private rental
properties (9.9%), the rest being made up of local authority owned housing.
With this in
mind, I carried out some further research and found that three bedroom terraced
and semi-detached houses in Whaddon have outperformed those detached houses in Charlton
Kings. This is because a three bedroom mid terraced / semi-detached house on Whaddon
have been selling on average recently for £125,700 and the achievable rents
have been £741 per calendar month. The yield which could be achieved from
property in Whaddon is therefore around 7.07% per year. When we compare this to
the possible 3.06% per year yield on Charlton Kings, that yield/return is 131%
proportionally higher in Whaddon than Charlton Kings.
We must
remember however that yield is not the sole consideration when investing in Buy
to Let properties. Areas which offer good yields (ie Whaddon), normally suffer
from poor capital growth (ie the properties in the area with poor yields don’t
up in value as quick as the posher areas.) Looking at average property values
in Charlton Kings back to 2002, the average property in Charlton Kings has
risen by 91.7% to today. However, average values in Whaddon have only risen by 72.1%
in the same time frame. It just goes to
show, do you want yield or you want capital growth when in investing in buy to
let property?Cheltenham ’s
property market, please call me on 01242 221188 or visit our office on the Bath Road
One of the
most sought after places to live in is Charlton Kings on the South Easterly
side of Cheltenham . There are 4,463 households
in Charlton Kings and an impressive 3,715 of those households (83.2%) are owner
occupied, yet only 435 of those households (or 9.7%) are privately rented. Charlton
Kings is a very popular area with buyers and tenants alike. The average value of a property is £406,000
and the average rent is £1,036 pcm (this equates to an average yield is 3.06%
per year). Interestingly, the majority
of properties sold in Charlton Kings over the last 12 months were detached
properties selling for an average price of £666,300, whilst semi-detached
properties sold for an average of £306,300 and terraced houses achieved an
average price of £253,500. Whaddon on
the other hand is a different story altogether. Only 1,273 of the 2,443 Whaddon
households are home owners (52.1%) and surprising only 244 private rental
properties (9.9%), the rest being made up of local authority owned housing.
With this in
mind, I carried out some further research and found that three bedroom terraced
and semi-detached houses in Whaddon have outperformed those detached houses in Charlton
Kings. This is because a three bedroom mid terraced / semi-detached house on Whaddon
have been selling on average recently for £125,700 and the achievable rents
have been £741 per calendar month. The yield which could be achieved from
property in Whaddon is therefore around 7.07% per year. When we compare this to
the possible 3.06% per year yield on Charlton Kings, that yield/return is 131%
proportionally higher in Whaddon than Charlton Kings.
We must
remember however that yield is not the sole consideration when investing in Buy
to Let properties. Areas which offer good yields (ie Whaddon), normally suffer
from poor capital growth (ie the properties in the area with poor yields don’t
up in value as quick as the posher areas.) Looking at average property values
in Charlton Kings back to 2002, the average property in Charlton Kings has
risen by 91.7% to today. However, average values in Whaddon have only risen by 72.1%
in the same time frame. It just goes to
show, do you want yield or you want capital growth when in investing in buy to
let property?
If you would
like more information on investing in Cheltenham ’s
property market, please call me on 01242 221188 or visit our office on the Bath Road
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