We get a lot of investors coming to both our Hanley and Newcastle offices to ask that very question and often that is how our relationship with our customers started.
Only this week a couple from Stafford came to discuss potentially investing in a 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 increase/capital growth. They couldn’t decide between modern developments in Trentham or Burslem and so we did a bit of research
Kennington Oval in Trentham is a sought after area to live on. The average semi-detached house sells around £167,384 and rents are roughly £935 per calendar month.
A similar sized semi-detached house on Ironstone Walk in Burslem can be bought for £187,444 and the achievable rents can be around £743 per calendar month.
The yield which could be achieved from property on Ironstone Walk is around 4.76% per year. When we compare this to the possible 6.70% on Kennington Oval, it is nearly 40% higher. However, we must remember that yield is not the sole consideration when investing in Buy to Let properties. The average value of a semi-detached house on Ironstone Walk in 2006 was £184,950, which has since risen by 1.35%. A semi-detached house on Kennington Oval in 2006 was £165,000 meaning the value has increased by 1.44%.
Ultimately we have seen both estates to be equally good rental areas which attract families or professional couples. Neither have shown much capital growth since 2006 which considering the property market between then and now isn’t surprising but both areas are popular with buyers and renters.