I was talking to a couple last week, who are considering becoming landlords for the first time and they were looking for advice as to whether a property on Stamford Street or Victoria Street would make a better Buy to Let investment. They were interested in which would offer a better return/yield, and whilst properties on both streets can let and sell well, I wanted to do a bit more research to help them with their decision.
Over the last three years, the average value of a property on Victoria Street has been around £83,800; while on Stamford Street it was nearly 11% more, at around £93,100. To better understand the investment opportunities available, we considered the rents of the same three year period. The average rent achieved on Stamford Street was in the region of £472 pcm, giving an average yield/return of approx 6.1%. On Victoria Street the average rent was slightly lower, at around £439 pcm, with a corresponding yield/return of 6.3%.
However, one must also consider capital growth and how the value could change over time. In 1995, a terraced house on Stamford Street would have cost approximately £31,500 and on Victoria Street the average value was £27,500. This shows that the average property value on Stamford Street has risen by 295% since 1995, and on Victoria Street has risen by 304%.
Ultimately, we found both streets to be equally good investments, but as you can see there is hardly any difference in the yields/returns or the increase in values, which we would not have identified without that extra investigation. In this case, it depends on the best available property to buy on the day.
If you are a landlord, new or old, feel free to visit Carly French (Branch Manager) in our office on St Peters Hill to ask her opinion on which property investment is best for you.
