If you are thinking of investing in property you need to
consider the growth on the capital invested in a property as well as the rental
yield you can be likely to expect.
I looked through the figure for properties in Melton Mowbray
and this week I concentrated on my firm favourite a modern 2 bed house.
There are a few
developments that were built around 10 years ago – still modern enough to be
built with efficiency in mind and you would expect them to be low maintenance
for the next 10 years.
Using Rightmove’s log of sold prices you can see exactly
what each house was purchased for and what they have recently sold for as the
data is collected from the Land Registry.
I found modern 2 bed properties that had been bought in 2005
and sold again in 2016 had seen an average of 11.5% growth in the capital over
this time. When you consider during this 10 year period we have also had a
double dip recession I think that’s pretty good going.
The rental income on these has also increased over this
time. Back in 2005 we would be getting £525pcm for these 2 beds and now we are
getting £595pcm.
Asfordby has also seen an increase on the 2 bed houses built
around the same time, these have seen a 15% growth in capital since 2005. There
are not many of these types of houses in our area though as a lot of the new
building stopped around 2008.
If you consider purchasing a brand new property in 2017 you
can expect to pay a premium and unless a deal can be negotiated with the
developer the yields are not always favourable for investors – this is why many
like the properties built around 2005.
The difficulty for investors is getting hold of these types
of properties. They don’t come on to the market very often and they sell
quickly. Keep an eye on my blog for properties coming up for sale in the Melton
area.
