Last week, a couple from the Barrowby Gate 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.
Winchester Road on the Barrowby Gate was built by Bococks in the 1980s, as one of Grantham’s premier roads to live on. It is one of the most sought after places to live on the Nottingham side of Grantham. The average three bedroom semi-detached house sells at around £160,000 and rents are roughly £600 per calendar month.
With this in mind, it was a surprise to find that similar sized three bedroom semi-detached houses on Hornsby Road, off Trent Road in Grantham, have outperformed those on Winchester Road. This is because a three bedroom semi-detached house on Hornsby Road can be bought for around £78,000 and the achievable rents can be around £435 per calendar month.
The yield which could be achieved from property on Hornsby Road is around 6.7% per year. When we compare this to the possible 4.6% on Winchester Road, it is nearly 45% higher on Hornsby Road. However, we must remember that yield is not the sole consideration when investing in Buy to Let properties. The average value of a three bedroom semi-detached house on Hornsby Road in 2001 was £49,050, which has since risen by 59% in the last 12 years. A three bedroom semi-detached house on Winchester Road in 2001 was £78,800, meaning the value has increased by an impressive 103% in the same 12 years.
If you would like more information on investing in Grantham’s property market, please call me on 01476 542100 or visit our office on St Peters Hill.
