For Buy To Let landlords, there are two key factors that determine their return on investment – the rental yield, and the capital growth of the property. Across Bournemouth, both of these factors have been very strong over the last few years, making it one of the best current places to invest in the UK for Buy to let.
I was speaking to a landlord I have known for a while who has owned a few properties on Christchurch Road
for the last thirteen
years. She came in to our office to discuss the rise and fall of property
prices on the street and how this has affected her yield
over the years, compared to Bournemouth overall.
In 2002, when she
purchased her first property on Christchurch road, the average value of a 2 bedroom flat on the street was £105,000 which had a sharp rise to £125,000 by 2004. This rise in
value continued, with average values being £160,000 in 2006 at the height of
the property market. I was invited around to let the landlord know what she
would get in today’s market for the property if she did decide to sell. Property
prices have continued to rise in this area of town due to the continued
increase of demand for these types of properties. In fact her property, which
she had recently re-decorated and re-let, would sell quite quickly for an
asking price of £195,000. There has been a growth of over 85% over the course
of 13 years.
Looking at Bournemouth overall, there has been huge capital growth across most
areas. On average this has been around 70%-80% for flats and over 100% growth
for semis and detached properties. If you would like to see more details on this,
please see the article I wrote a few weeks ago where I discussed how properties
had increased by over 300% over 20 years. The link is here.
When she told me
of the rents she had achieved on the street, they seem fairly stable over the
thirteen years. In 2002-2003 she was achieving rent of around £500 per month. This
stayed quite flat until around 2007 when she put the rent up to £750. The
landlord, after doing a few small cosmetic works, recently let one of her flats
for £950 per month yielding 5.8%. The average for this kind of property in the
area property is around £850, but there is a really big demand at the moment
and the small update has made a big difference. The increase in this particular
area is really driven from the growth of the student population who attend the
Bournemouth university.
It’s not just Christchurch road that is seeing
great returns for investors though. Across Bournemouth, Buy to let investors
are achieving greater rents for their properties, generating better returns. I
would strongly recommend you speak to an expert in the area to discuss the best
places to invest, as every street is different.
If you would like some advice with your
potential investment, please do get in touch either call me on 07979123970,
send me an email to luke.marchbanks@belvoir.co.uk
or pop into the office for a coffee and chat. My advice comes completely free,
and I don’t sell meaning I can give you fully impartial, honest advice about
your investment.
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