Friday, 14 November 2014

Ex-council Princess Drive semis out perform Stephenson Ave property market by 49%

We all know Stephenson Avenue as one of the sought after places to live in Grantham, as it’s the major entry road into the modern Gonerby Hill Foot Estate with good schools nearby. The average property here sells at around £175,400 and the average rents are £637 per month.

These are reasons a landlord came to our office to find out if Stephenson Avenue would be a better rental investment than Princess Drive, where she has a property at the moment. When we compared the two, we found Princess Drive is made up of three bedroomed semi-detached properties which were built in the 1950’s and are ex-local authority. On average they sell at around £98,700 and can rent at around £525 per month.

It became interesting when we compared the possible annual yields, as Stephenson Avenue could achieve 4.3% per year but yields are proportionately 49% more on Princess Drive at around 6.4% per year. However, we must remember that yield is not the sole consideration when investing in buy to let. The average value of property on Princess Drive has risen by 52% since 2001, but Stephenson Avenue has risen by 83%.

Do you want a good yield or do you want capital growth? Remember, since 2001, inflation has been  44.4% according the HM Government.

So Princess Drive has only gone up, in REAL terms by 7.6%  (52% less 44.4% which equals 7.6%) whilst Stephenson has gone up in REAL terms by 38.6%  (83% less 44.4% which equals 38.6%)

Yield or Growth?  That is the question!

PS I have had a few Grantham people email me Rightmove links of properties they are considering buying. As I don’t sell houses or even let them (anymore), I am always happy to give my opinion (good and bad) on their suitability as rental investments .. bang an email over and i will give you my thoughts