One of my existing landlords came in to discuss his investments in Crawley and the possibility of expanding his portfolio. One of the most important considerations you will make before investing is the balance between annual return/yield and the annual value increase/capital growth. When purchased, both of his properties had warm air central heating so I thought it would be interesting to compare 2 areas that were built with this system.
The three bedroom houses around Wakehams Green Drive, Pound Hill were built in the early 70’s and featured amongst other things, gas warm air central heating. Pound Hill is considered to be one of Crawley’s premier neighbourhoods with excellent school ratings. The average three bedroom terraced house is valued at around £255,000 and rents are roughly £1150 per calendar month.
With this in mind, it was a surprise to find the similar sized three bedroom terraced houses around Creasys Drive in Broadfield have outperformed those on Wakehams Green Drive. The original parts of Broadfield were constructed in the 1970’s and featured the same gas warm air central heating in many of the houses but the neighbourhood was primarily built by the local council. £190,000 is the average price for a three bedroom terraced house in this part of Broadfield and the achievable rents can be up to £965 per calendar month.
The yield which could be achieved from property on Creasys Drive is around 6.11% per year. When we compare this to the possible 5.37% on Wakehams Green Drive, it is nearly 14% higher in Broadfield.
However, we must remember that yield is not the sole consideration when investing in Buy to Let properties. In 2004 the average value of a three bedroom terrace house on Creasys Drive was £145,000, which has since risen by 33% in the last 10 years. However the properties around Wakehams Green Drive were £170,000 in 2004, meaning the value has increased by an impressive 50% in the same 10 years.
If you would like more information on investing in Crawley’s property market, please call me on 01293 735000 or visit our office on the High Street.