Wednesday, 24 September 2014

Thanington Estate outperforms the South Canterbury property market by 66%

 I was recently speaking to a landlord, who lives in South Canterbury just off New Dover Road, who took me up on the offer of an informal chat about the Canterbury property market after reading my article in the Canterbury Times.  We got talking about investing in Canterbury and how different areas of the City performed against other areas. Investing in Canterbury property is a balancing act between capital growth and yield. On the one hand going for strong capital growth seems an obvious choice because of the potential to generate long term capital profit, especially with inflation eating away at our savings. However, rental yields on high capital growth properties tend to be low meaning if you are taking a high percentage mortgage, the rent doesn’t pay the mortgage payments.

It became really interesting as we chatted and compared his area of South Canterbury against the Thanington Estate, where he was brought up in the 1950’s. The average price of a house in South Canterbury is currently £367,800 with the average rent being £1, 206 per month. This would give our landlord a yield of 3.9% per year .. very reasonable indeed. Until you consider those ex-local authority 2 bed apartments on the Thanington estate, which currently  sell for around £118,700 and let, depending upon condition, for around £645 per month, a yield of 6.4% per year, which is a 66% proportionally higher yield.

However, like I said a few weeks ago, yields are not everything in property investment. Another is how the value of the property goes up over time. Better properties in better locations don’t have the best yields, but their property values tend to go up quicker over the long term.

In the last 13 years property values have only risen on average by 41.3% in the Thanington Estate, which is very impressive considering there was the 2008 property crash.  However, property values for houses in South Canterbury have risen by an average 84.3% in the same time frame. So, if you are investing in Canterbury property do you want capital value or yield?

Now I know there aren’t many landlords that would buy a large semi-detached or detached house in South Canterbury to rent out. It’s just that looking at the Canterbury property market in more depth enables me to give you the best advice and opinion to help you find the best property to invest in. It is in our interest that you buy a property which will rent well, and for long periods of time. If you would like any advice on choosing properties, please come and see me at our office on Watling Street in Canterbury.

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