Wednesday, 19 November 2014

Hales Place property market out-performs St. Stephens by 69%


 
 
I was talking to a couple last week, who are considering becoming landlords for the first time after they had come into some money, knowing the return they would get investing in the Bank would be rather poor. They live in one of those lovely three storey Victorian town houses on the edge of St. Dunstan’s. They were looking for advice as to what kind of property they should buy, but they particularly wanted it to be on their side of the City (West / North West of Canterbury’s city centre.

I initially looked at the detached houses in the St. Stephen’s area. The average value of a four bed detached property in the St. Stephen’s area is £438,800. The four beds rent on average for £1,351 per month, giving us an average yield of 3.69%. I then considered the Hales Place area further up St. Stephen’s hill on the right hand side. Semi-detached houses and town houses are worth on average £225,100 here and rent for around £1,174 per month, giving a much better yield of 6.26%, which is proportionally just over two thirds (or 69% to be precise) more than St. Stephen’s.  This is because Hales Place is very popular with the student population of the city considering its proximity to the University.  With student lettings rooms are rented on an individual basis, this gives a much higher return.  Therefore with yields of nearly double St. Stephen’s, surely this is the best place to invest your money in?

However, to judge a rental investment, you must consider the capital growth as well as the yield. Since 2001 the average Hales Place property has risen by 55.5%, whilst St. Stephen’s values, have risen by 110.5%. Ultimately, we found both areas to be a good investment depending on your own situation, but as you can see, Hales Place does offer better yields, but at the expense of better capital growth which St. Stephen’s offers.  

If you are a landlord, new or old, we’re certainly more than happy for you to pop in and see us at our offices on Watling Street for advice on where to buy in Canterbury or email me on david.anthony@martinco.com