Gloucester vs Bristol property values – which City has performed the best?

One topic that I am always asked about, both by existing landlords and new ones, is how one city’s property values have performed against another. When purchasing a buy to let property, there are two ways landlords make money through property letting - capital growth and rental income growth.

When a property increases in value over time, it is known as 'capital growth'. Capital growth, also known as capital appreciation, has been strong in recent times in both Bristol and Gloucester, but the value of property does go up as well as down, and of course the local conditions surrounding your property have a big effect. Rental income is what the tenant pays you - hopefully this will grow over time too. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. 

A landlord from Stroud, who has a number of properties in both Gloucester and Bristol, asked me a few weeks ago about the difference between Gloucester and Bristol housing markets. I was quite surprised with my findings and wanted to share them with you.

The average property price in Gloucester is currently £201,800. In the last 12 months property values in Gloucester, according to my calculations, have risen by just over 9.5%. Yet roll the clock back a few years and in 2011 values dropped 4.4% from the property values being achieved in 2010. However, irrespective of the roller coaster prices we have seen in Gloucester, they are still 15.8% higher than the 2009 slump.

Property values in Bristol over the last 12 months have risen by 10.4% and over the last five years (2009) by 17.3% which, on the face of it, means that Bristol has performed better than Gloucester.  However, go back to the property boom of 2007 and property values in Bristol are only 2% higher than they were at the peak of the 2007 boom, the same percentage figure as Gloucester’s. (Although Cheltenham’s are 3.2% higher!)

Then there is the question of yield, as Bristol normally has higher yields than Gloucester, but Bristol’s rental market can be quite fraught with its stricter rules. Each Gloucester (and Bristol) landlord will have different needs and requirements in his or her property investment. Knowing what has happened to values in different towns, enables us to spot any trends or opportunities for buy to let landlords. If you would like to discuss my thoughts on the rental markets, feel free to pop through the door of our offices on Worcester Street in Gloucester or send me an email to neil.west@belvoir.co.uk