Matson property market outperforms Churchdown by 400%

 I was talking to a couple last week, who are considering becoming landlords for the first time after they had come into some money, knowing the return they would get investing in the Bank. They were looking for advice as to what kind of property they should buy but wanted some advice on what property to buy and in what location.

Their budget was in the £300,000 to £350,000 region, so I initially looked at semi detached houses in Churchdown. The average value of a three bed semi detached property in Churchdown area is £231,500. The three beds rent on average for £850 per month giving an annual yield of 4.4%.  This gave us some change and I then suggested they get a second property with the aid of a mortgage.  However, the couple were not interested in taking a mortgage (although it does give certain tax advantages to the landlords when you buy with a mortgage).  Therefore, I considered the Matson area on the South West side of Gloucester.   One bedroom maisonette apartments are worth on average £53,000 here and rent for around £425 per month, giving a much better yield of 17.6%, which is proportionally 400% more than Churchdown.

However, to judge a rental investment, you must consider the capital growth as well as the yield. Since late 2001/ early 2002, the average Matson property has only risen by 53.1% (interesting the cost of living/inflation has risen by 47.3% since late 2001/early 2002, so in REAL terms, property in Matson has hardly risen at all).  This is quite relevant when you consider overall Gloucester average property values have risen by 74.2% over the same time frame.  However, even better, semi-detached houses in Churchdown have risen impressively by 118.2% during this time. Ultimately, we found both areas to be a good investment depending on your own situation, but as you can see, Matson does offer better yields, but at the expense of the capital growth that Churchdown offers. 

If you are a landlord, new or old, we’re certainly more than happy for you to pop in and see us at our offices on Worcester Street for a chat or email me direct on neil.west@belvoirlettings.com