Monday, 28 July 2014
Canterbury Property market outperforms Ashford’s by 35%
A landlord with a small property portfolio came into our office on Thursdaylast week. He lives in the Old Dover Road area of Canterbury and has properties in both Canterbury and Ashford. He wanted to ask our opinion on the property markets in both places and where he should purchase his next Buy-to-Let property. Looking at Canterbury, the average property price is an impressive £291,300 and the average rent is equally high at £1,124 per month. In Ashford, an average property is £267,900, and the average rent is lower at £757 per month. That makes the annual yield / return in Ashford’s average annual yield /return being 3.4% per year, whilst in Canterbury it is proportionally over a third higher(or 35% to be exact) with an average yield of 4.6% per year.
However, investing in property is not just about yield. One must also consider the increase in value of the property. This is because there is generally an inverse relationship between yield and capital growth, so the higher the yield, the lower the capital growth and the higher the capital growth, the lower the yield. This means property investment becomes all about balancing the scales. Quite interestingly, property values over the five year in Ashford have risen by an impressive 18.8%, whilst in Canterbury, in the same period, they bucked that relationship and they rose by an even more impressive 23.5%. This would mean if you bought an average property in Canterbury, your property would have gone up in value by an additional £14,515 compared to Ashford’s and you would have received an extra £22,020 in rent over those 5 years.. a win-win situation!
Therefore, I would say both places can be a good area for an investment property, but it is a decision that shouldn't be taken lightly. These are only averages, so the yields for some 2 bed apartments in some areas of Canterbury can achieve yields of nearly 6% per year, so adding the capital growth, existing landlords have seen a very good return in 2013 .. much better than the Building Society!
Over the last few months, many first time landlords have contacted me for my thoughts and opinions on what (and not) to buy for their first time buy to let investment. I can give an objective opinion on the whole of the Canterbury property market. Some landlords want high yields, some want no hassle, some good capital growth, some don't know what they want!
I don't charge for my advice because if I offer you the best opinion and we build a relationship, then you might just (and there is no obligation or expectation to this) use me to manage those properties for years to come, a property that we jointly decided met your requirements for the investment .. because that is what it is .. an investment. So, feel free to pop into our offices on Watling Street for a chat about the property market in our city.