I was talking to somebody last week from the Murton area, who was considering becoming a landlord for the first time. She visited our office to ask us whether buying a property on Rose Street or Ashville Street in York would make a better Buy to Let investment, and which would offer a better return/yield. She knew the area well, as she lived around there over ten years ago. I confirmed that the properties on both streets let and sell well, but I wanted to do a bit more research to help with her choice…
The average price for a property on Ashville Street has been £172,514 while on Rose Street it was over 11% more, at £192,040. Bear in mind these two streets are within about 5 minutes’ walk of one another, this makes property investment all the more interesting, in that investments so close to one another can vary almost wildly. It is worth bearing in mind that these values are based on averages of price agreed and if we were to really look on a more granular level, the 11.32% difference could be made up of sellers circumstances e.g. urgency in which to sell, quality of the product being sold and time of year, all of which invariably will have had an impact.
To better understand the investment opportunities available, we took a look at the rents achieved over the last year. The average rent achieved on Rose Street was £700 pcm, giving a yield/return of 4.37%. On Ashville Street the average rent was slightly higher, at £725 pcm, with a corresponding yield/return of 5.04%. We found both streets to be as good as each other, but as can be seen there is a subtle difference in the yields/returns, which we would not have identified without the extra investigation.
An interesting statistic I discovered is that properties on Rose Street have exchanged hands nearly seven times more than on Ashville Street. As for capital appreciation, property prices on both streets have increased in value over the last five years, both by circa 25%, in Ashville Street by £34,737 & in Rose Street, by £38,664. Effectively, Ashville Street seems to provide better yields whereas Rose Street has provided better capital growth potential for owner occupiers and buy to let landlords. Capital growth or yield, it really comes down to the best available property to buy on the day.
If you are a landlord, whether you deal with us or not, feel free to visit into our office on Gillygate, York to ask our opinion on which property investment is best for you.