In this ever more difficult market, landlords and investors are always struggling to find a bargain. A landlord who had been reading our articles about price changes in Exeter came in to our office recently to ask our advice about the best area of the city to invest in for capital growth.
I found that one of those superb four bedroom terrace
houses in Gras Lawn was bought for only £125,000 in 2010. Knowing Gras Lawn it is clear something
extreme must have taken place with this property for it to sell at this price,
however it is an example that properties can still be found below market
value. Gras Lawn tends to hold its price
very well on average, being near the hospital, main route in and out of Exeter and
being known as a prestigious development.
The same property sold for £342,500 in March this year, which is an
increase of 174%. However, prices in the rest of EX2 during this same time
period rose by 5.8%, so it should have only sold for £132,250 if in keeping.
This shows that although rare, there are
still one-off deals to be had and money to be made. It is worth also looking at
the opposite end of the scale, and remembering that money can be lost too. For example, a bungalow on Sycamore Road sold
for £190,000 in June 2013 and later sold for only £173,000 in March 2014,
giving a loss of around 9%.
Of course, it is not all about area. I don't know what the specific issues were
with the two properties, but superb terrace houses can have structural problems
and flats on otherwise good roads can be in need of repair. But get the area
right and you will at least be able to have confidence that, all other things
being equal, your investment should perform above the average.
In our experience, it is always worth
looking in detail at the way the property market has been performing at the
local level before jumping in to what seems like a good purchase at the time. Being experts in the Exeter property market
we are always happy to give our impartial advice on the best (and worst) areas in
which to buy – do get in touch or call in.
