The other week, one of my landlords asked if it was worth investing in the villages to the south of Loughborough. He wanted to know if Sileby performed well for rental yields when compared to somewhere like Quorn with its higher property prices.
Sileby is a large village with excellent links to Loughborough, Leicester and the A46/M1 and it has a train station. In 2001 there were nearly 2,600 households in Sileby and with plenty of new builds such as Bradgate Close this figure has increased notably. Quorn is slightly smaller with just over 2000 households in 2001 and again, there have been new builds in the last 12 years. However, house prices in Quorn are higher, amongst the highest in the area, whilst prices in Sileby have been much more modest; this could assist rental yields.
Last year the average price paid in Sileby was a shade under £134,000 and the average asking rent was £469 pcm. This gives an average gross yield for the area of 4%. In Quorn average prices were just over £272,000 with impressive average asking rents of £755 pcm. However this gives an average gross yield of just 3%.
These are just averages though and you can achieve better or worse figures than these. Recently a 2 bed semi sold on Staveley Drive Sileby for £105,000; the average rent for a 2 bed in that area is £525pcm and if purchased as a buy to let it would have given a gross yield of 6% – that’s quite healthy for a GY figure.
It really comes down to what you want from the investment. Capital growth or yield or a balance between the two. Average property prices in Quorn and SIleby have shown a remarkably similar percentage drop in price; both are 8.6% lower than at their peak 5 years ago. In Sileby that’s a drop of just under £14,000 however in Quorn that is an average drop of over £25,000 – the good news though is that both are showing positive growth in house values during the last year.
Of course there are a wide range of other factors to be taken into consideration when considering property as an investment. If you would like some advice or just a second opinion please do drop into our office on Ashby Road right opposite Sainsbury’s; ask for Jim or Carol.
