Are you considering purchasing a buy-to-let property in the local area? If you are, you might be interested in knowing which of your local towns have performed the best in terms of Capital Growth.
When purchasing a buy-to-let property, there are two ways landlords can make money through property letting - Capital Growth and Rental Income Growth.
A few weeks ago I was discussing with a landlord from Swanwick the difference in prices between the Alfreton and Ripley housing markets. This gentleman had a number of properties in both Alfreton and Ripley and was particularly interested in the Capital Growth on his properties, but also wanted to ensure his yield was relatively fair. I was quite surprised with my findings and wanted to share them with you.
The average property price in Ripley is currently £159,466. In the last 3 months property values in Ripley, according to my calculations, have dropped by just over -2.21%. Whilst in Alfreton, the average property price is £151,004 having dropped by -1.81% in the last 3 months. Therefore, is a property in Alfreton a better investment?
Well, not necessarily.
Over the last 5 years, property values in Alfreton have risen by 20.12% and in Ripley by 24.62%, showing that over the last 5 years, property values have increased at a 22.37% quicker rate in Ripley than those in Alfreton
But then there is question of yield, Alfreton normally has slightly higher yields than Ripley, but then Alfreton’s rental market can be quite competitive.
According to the Office for National Statistics (ONS) the typical property value in the UK was around £217,000 in July 2016 marking an 8.3% year on year increase. Whilst the 8.3% rate of annual growth is a slowdown compared to a rate of 9.7% recorded in June it continues “the strong growth seen since the end of 2013” the report said.
A study of market conditions by the Royal Institute of Chartered Surveyors (Rics) found that while price growth expectations had been tempered by the fall out from the referendum, a shortage of new homes would support growth in the longer term.
Each Ripley and Alfreton landlord will have different needs and requirements in his or
her property investment. Some may opt for shorter and some for longer term investments in property. If you want an unbiased opinion on what (and what doesn't) make a good property investment, knowing what has happened to values in different towns over the past months and years, enables us to spot any trends or opportunities for buy-to-let landlords.
If you would like to discuss my thoughts on the rental markets in these areas, please send me an email to enquiries@rfoproperties.co.uk or call a member of our team on 01773 609446