I was talking to someone who lives in an Oxford detached house on Staunton Road, Headington. He wants 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 bit more.
Having lived in Headington for over 8 years, he felt comfortable investing in the area as he knew it well, so we started to discuss the property market in this location.
Firstly we looked at yields on a couple of properties. A three bedroom property in Franklin Road, Headington was purchased for £330,000 and went on to achieve a rent of £1550 per calendar month. This gave a 5.4% gross yield return for this investment. In the sought-after area of Staunton Road, Headington, a 3 bed semi-detached house sold for £495,000 and achieved a rent of £1650, giving it a yield return of 4%. Slightly under the yield expectancy for investment.
Yield does of course only tell half the story. Property values in Oxford have risen on average by around 58% over the last 15 years. Going even further back to 1983, the average price for a semi-detached property in OX3 was £52,583 compared with today's average at £337,173. An 89% increase!
Yield is a big factor when purchasing for investment but capital growth is not to be forgotten. There is little doubt property still leads the way when looking to make a sound long-term investment.
I will leave you with this; If you had decided to put the money into the stock market and based on investment from Q1 in 1999 your £52,583 investment would now be worth £58,062. Hmmmmm??!
If you would like to talk to us about your potential investment, please come into our offices on Woodin's Way, Paradise Street, Oxford - or give me a call.
Richard - Lettings Manager for Martin & Co Oxford