Cheltenham property market outperforms Gloucester’s by 68%

Last week, a landlord who lives in Southam, just north of Cheltenham rang me to discuss the rising property values in the Cheltenham area. He owns a varied portfolio of rental properties primarily in Leckhampton, Up Hatherley and one in Gloucester. He was worried that property values were out of control and if he should wait before adding to his portfolio. I did some research and this is what I found out and wanted to share my findings with you.

Over the last 12 months, Gloucester property values, had increased from £183,100 to £192,200, a rise of £9,100 or just £175 per week, which is a modest 5% increase. In Cheltenham average property values have risen from £262,600 to £284,500 , a rise of £21,900 (or £421 per week), or in terms of a percentage rise, an impressive 8.4% in a year (making the rise in property values in Cheltenham, over the last year, 68% higher than Gloucester’s.

However, that doesn’t tell the whole story, because capital values aren’t the only factor for investing in property. The average yield (or return) is the other part of the investment. The average rent achieved in Cheltenham is, as one would expect, quite high at £923 per month. This gives us a decent yield of 3.9% per year, until you compare it with Gloucester’s. As mentioned above, the average property value, as one would expect when comparing with Cheltenham, is much lower at £192,200, as is the average rent at £790 per month... but work your yields out, and Gloucester landlords enjoy average yields of 4.9% per year, which doesn’t much sound more, but it’s still proportionally a quarter more than Cheltenham’s.

If you would like some advice about buying to let, be you a landlord with a portfolio or someone thinking of investing in the Cheltenham or Gloucester rental market for the first time, please email me on neil.west@belvoirlettings.com Next week, I will look at property values over the last five years in both Cheltenham and Gloucester and it will show a completely different story can told between the two areas when we look at property values over a longer time frame, and will certainly surprise people from both locations.