Myth-busting – Electrical Safety installations Act 202011:19 AM, 3rd August 2020
About 2 weeks ago 84
Every Town and City in the UK has its own unique set of dynamics when it comes to property values and rental yields. For example, I know that in Norwich, one the most established areas for letting is known as the Golden Triangle because it’s very close to the University, the Hospital and within easy access of the City Centre. The North of the City is also incredibly popular for lettings due to the number of East European migrants and offshore workers who need easy access to the airport and the industrial estates around it. Prices and yields within just a mile of the airport differ massively though.
As an example I’ve taken a look at the major property portals and searched for three bed properties within a mile of the Norwich Airport postcode. The results are quite astonishing:-
As you can see, one property is more than three times the price but the rental value of the more expensive one is only 20% more. When we convert these numbers into rental yields, the more expensive property returns a gross yield of approximately 3.25% whereas the cheaper property produces a more more attractive yield of 9%. The returns from both are better than you would would get from a bank account at the moment, especially when you add long term capital growth from increasing property values over the longer term. Nevertheless, as an investment property as opposed to something you might buy to live in yourself the returns are very different as you can see. Why would you accept a 3.25% return on your money when 9% is possible?
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In the interests of transparency, AA-Lettings is owned by my brother, Adam Alexander and his wife. The business was created to manage the property portfolio of our family members and is now looking to expand to service the needs of other landlords with property based in Norfolk. Landlords are encouraged to retain their own deposits and to arrange their own deposit protection via the NLA My Deposits scheme. AA-Lettings does not hold client monies for longer than 5 days.
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