Wednesday, 1 October 2014

Do properties in Chestfield make good investments for Buy to Let?

I was talking to someone who lives in one of those 1930’s detached houses in Chestfield, near the centre of the village.  The village of Chestfield is set between the towns of Whitstable and Herne Bay and is approximately five miles North of Canterbury. It is popular with buyers and tenants alike, especially because of its proximity to the road network, train stations and its woodland areas to the South. Interestingly though, of the 1,305 properties in Chestfield, over 1,079 of them are detached (or 82%), compared to 31.6% average in Canterbury (Something that wouldn’t happen today with the price of land.). There are also 171 semi-detached houses and 37 terraced/town houses, the remaining accommodation being made up of flats and apartments.

Anyway, he was eager to purchase his first Buy-to-Let property and has noticed our previous articles, so was interested in getting to know the industry a little better. As he has lived in the Chestfield area for over 8 years and he felt comfortable investing around there as he knew it well, we started to discuss the property market in this area. With my local knowledge, I was able to tell him that there are plenty of 3 bed detached houses here, the larger ones can be bought for around £285,000 and a good one rents for around £950 per month, a healthy yield of 4.0% per year.  The gentleman then asked me whether the larger 5 bed executive houses in the village would make a good investment.  Taking an average 5 bed house in the village which sell for around £575,000 and let in the region of £1,500 giving a yield of only 3.1% per year.  However, it is the semi-detached houses that particularly caught my eye and these can be purchased for £170,000 and rent quite easily at £750 per month giving a more tempting yield of 5.3%, especially since 2004, as properties have on average risen by around 33.4% in Chestfield, which is good when you consider the CT5 postcode average is only 31.4% over the same time frame.
So with a reasonable yield and excellent capital growth, semis in Chestfield, especially 3 beds, could make a decent future investment. However, you may also want to consider Whitstable or Herne Bay as these have seen equally good capital growth with slightly higher yields. Whether you are a landlord of ours or not or someone thinking of investing in the rental market for the first time, drop by our offices in Watling Street for advice on where the bargains are in Canterbury.

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