Leamington Spa Property market: South of River outperforms the North by 22%

Following a discussion with a local landlord who lives in the Myton Road area, between Leamington and Warwick, just near St. Nicholas Park, we got chatting about the different sides of the river in Leamington and how it affected the  property market. Interestingly, he had a couple of properties in both areas and wanted some advice on where to buy next. I did a comparison between North of the River and South of the River, and quite surprisingly the property market South of the River Leam had outperformed the North market by 22%!

South of the river's property market - 22% better than the North's

The average price of property South of the River is £215,700. When you consider the rents that are achieved South of the River are £978 per month, this gives us a yield (annual growth  or the annual rent from a property reflected as a percentage of the value of the property) of 5.4% per year. 

So is South of the River the best investment? Well, yields North of the river , where the average value of a property is £302,100 and the average rent is £1,110 per month, offer a 22%  lower yield of 4.4% per year (compared to the 5.4% per year in the South), so surely it is the best investment, isn’t it?

This, however, is a great example of annual yield/return not being the only factor when choosing an investment property, as you should also consider how much the value of the property goes up in the long term. In the last 12 months, property values have only risen on average by 6.7% in the South of the River area, which is very impressive. However, average property values North of the River have risen on average by 8.25% (23% better than the South) in the same time frame. The question that every landlord must ask from their investment is,  do you want capital value or yield? 

I always tell Leamington landlords, capital growth and yield are two phrases that are one and the same with property investment and can have a big impact on the long term results of your property investment. 

 Many investors believe that by chasing high yielding properties they will make a faster profit than waiting for capital growth. The problem with this is that to achieve high yield you usually have to compromise on capital growth. Therefore,  it would seem the most logical solution is to find high a yielding property in a strong capital growth area. Such properties don’t exist (or if they do, I don’t know of them!)

This is because, as I tell my landlords,  there is generally an inverse relationship between yield and capital growth so the higher the yield, the lower the capital growth and the higher the capital growth, the lower the yield. This means property investment becomes all about balancing the scales. 

Whether you are a new landlord or an existing landlord, I don't charge for my advice because if I offer you the best opinion and we build a relationship, then you might (and there is no obligation or expectation to this) just use me to manage those properties and so I have plenty of time to earn money from you by looking after your buy to let property for years to come, a property that we jointly decided met your requirements for the investment .. because that is what it is .. an investment.  So, feel free to pop into our office’s in Leamington Spa for a chat about the property market in our town.

Coventry vs. Leamington Spa - which has the better property market?

Should you be investing in Coventry or Leamington Spa when it comes to property? 

Well it depends why you want to invest? Is it for yourself to live in? Is for investment? For buy to let? Everyone is different, but as I was chatting to a landlord from Stoneleigh, who popped his head through our door on Regent Grove in the Holly Walk area

Both towns are similar in size and, taking into account the surrounding villages, have similar average property values. The average property value in Coventry is £162,100 and in Leamington Spa is £264,500, whilst the average rents are at £866 per month in Coventry and £1,038 per month in Leamington Spa. 

This gives Coventry  an annual yield / return of 6.4% per year and Leamington Spa 4.7% per year. So surely Coventry is the better better bet if you were buying to rent it out?
This, however, is a great example of annual yield/return not being the only factor when choosing an investment property, as you should also consider.

Over the last five years, property values in Coventry have increased by 13.9% but by an impressive 20.1 % in Leamington Spa.

This is great for those that have already bought a property in Leamington Spa in the last 5 to 10 years. However, its even more interesting to note that even though prices have indeed risen by over 20% in the last 5 years, it hasn't been in a straight line. In fact, on average, even though prices are up by 7.6% since last Spring (2013), they did in fact peak in the Autumn 2013 and in the last 6 month's have dropped slightly by 0.5%  .. maybe a time to buy another?

It is in our interest that you buy a property which will rent well, and for long periods of time. If you would like any advice on choosing properties, come and see us at our office

 

Leamington Spa property values - 8th in Warwickshire

Just wanted to share some work I did for a landlord the other day, after he said property was the one of the most expensive areas to buy in Warwickshire. 

Even I was surprised our lovely town offers decent priced property, for both homeowners and buy to landlords alike.

.. however the thing that struck me was the position of Southam. Yes, it's true a detached house in Southam itself is nearly £50,000 cheaper than our Leamington Spa, but in the eyes of the Land Registry (where the info has come from you), Southam included the villages of Harbury,  Knightcote, Napton on the Hill and Priors Marston, which will of course bring up the averages!

1	Henley-in-Arden	£398,800
2	Shipston-on-Stour	£338,250
3	Stratford-upon-Avon	£322,500
4	Kenilworth	£316,950
5	Warwick	£301,600
6	Southam	£268,400
7	Alcester	£267,250
8	Leamington Spa	£264,500
9	Studley	£224,500
10	Rugby	£207,400
11	Atherstone	£192,800
12	Nuneaton	£165,300
13	Bedworth	£146,300