Hello and welcome to the October 2014 Property Report from Martin & Co Lancaster. We are delighted to be able to share our knowledge of the local property market.
In our area we have two major conurbations, Lancaster and Morecambe, and I am often asked how these compare. Whilst to answer this more fully, we should really drill down into what people mean by either area: are they including Torrisholme in Morecambe, are they recognising Heysham as a separate town, or indeed Skerton as Lancaster. The road systems and bridges (on which many of us enjoy the traffic queues), mean that often people see the River Lune, rather than the geographical boundaries, as the dividing line. But, if we look at how the two general markets compare, it makes for interesting reading.
Demand for rented property is almost three times greater in Lancaster, at some 42,800 searches in the last month compared to 14,500 in the same period for Morecambe. However when these are compared to the property available, we find that there is a similarly larger supply of rental property on the market in Lancaster with 217 properties and 70 for Morecambe, which is just over three times more property available in Lancaster. This means that whilst there are more people looking for property in Lancaster, the demand by enquiry per property would be greater in Morecambe.
Of course the yield is most landlords’ first priority and if we look at the current averages, Morecambe shows ahead of Lancaster with 4.3% vs 3.5% but such averages may not represent the properties which will appeal to a landlord. If we look in a little more detail, we can see that the returns on the more suitable one and two bed properties are more attractive, with Morecambe and Lancaster both coming back with an average yield of 6.4% (£409pcm/£76k Morecambe and £467pcm/£87k Lancaster) overall for one bed properties and yields of 4.8% (£510pcm/£126k) for 2 bed properties in Morecambe and 5.8% (£595pcm/£123k) in Lancaster. One final figure to bear in mind is the average asking price, which is £148,478 for Morecambe and £183,458 for Lancaster. These of course, being average figures, can only be used to offer a general insight and it will be the appeal and cost of a specific property and its resultant yield/capital growth opportunity on which any landlord should base their investment decision. However, with the now underway Heysham road link and opportunity for this leading to further industrial investment for Morecambe and Heysham, possibly the often discussed ‘Heysham 3’ power station in the long term, it may be that Morecambe will soon have the opportunity for growth in its property values and rental demand to match Lancaster.