Thursday, 2 October 2014

Warrington Property Market Growth vs Yield

Last week, a couple from the Chapleford area came to discuss potentially investing in property for Buy to Let. One of the most important considerations you will make before investing is the balance between annual return/yield and the annual value increase/capital growth. Chapleford Village is one of the most sought after places to live on the west side of Warrington. The average two bedroom terrace house sells at around £175,000 and rents are roughly £800 per calendar month.

With this in mind, it was a surprise to find that similar sized two bedroom terrace houses on Hazel Street just off Marsh house lane, have outperformed those on Chapleford . This is because a two bedroom terrace house on Hazel Street can be bought for around £70,000 and the achievable rents can be around £475 per calendar month.

The yield which could be achieved from property on Hazel Street is around 6.7% per year. When we compare this to the possible 5.4% on Chapleford it is nearly 24% higher on Hazel Street.

However, we must remember that yield is not the sole consideration when investing in Buy to Let properties. The average value of a two bedroom terrace house on Hazel Street in 2011 was £95,000 which has since dropped by 35% in the last 3 years. A two bedroom terrace house on Chapleford in 2011 was £99,995, meaning the value has increased by an impressive 75% in the same 3 years.

If you would like more information on investing in Warrington property market, please call me or visit our offices.

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