Last week, a couple from Crediton, came into our office to discuss potentially investing in Exeter for the first time.
As our regular readers will know, the initial consideration you must make before investing in property is the balance between annual return and capital growth. However, what affects these two things in Exeter are very varied and complex. The quantity of property and whether property is owner occupied or socially rented has a big difference on yield and capital growth.
It is worth looking at where the largest proportion of rented vs owner occupied properties are, will this have an effect on house prices and annual returns?
In 2011, the area of Exeter with the highest
percentage of owner occupation was EX3, with around 75.2%. This correlates to the average property
value, currently at £395,158, and the highest in the Exeter area, however gross
yields are in the region of only 2.7%, therefore it may not be the best place
to invest for annual returns but the capital growth should be strong.
On the reverse side, in 2011 properties in EX1 and EX4 had the lowest average prices of £227,605 and £222,601, and owner occupation of 56.50% and 57.16%. Looking at these figures I feel it is safe to say the higher the percentage of owner occupation, the higher the property price. Interestingly, EX4 has the highest average rent of £916pcm, giving a gross yield of around 4.9% so if you are looking for a higher annual return, this is certainly one of the areas I would focus on.
On the reverse side, in 2011 properties in EX1 and EX4 had the lowest average prices of £227,605 and £222,601, and owner occupation of 56.50% and 57.16%. Looking at these figures I feel it is safe to say the higher the percentage of owner occupation, the higher the property price. Interestingly, EX4 has the highest average rent of £916pcm, giving a gross yield of around 4.9% so if you are looking for a higher annual return, this is certainly one of the areas I would focus on.
There are numerous reasons why EX4
may be a preferred area for rental properties, there are lots of good schools,
Exeter University draws students and employees, the Met Office and excellent
access into the city centre.
There has been an increase in the number of households privately renting and this could be linked to the decline in the number of households getting on the housing ladder, usually by way of a mortgage. Those who read our recent article “How affordable are Exeter properties” will understand the difficulties buyers are facing.
To discuss investing in Exeter as there are many points to consider, please come and see us at our South Street office or call 01392 254488.
There has been an increase in the number of households privately renting and this could be linked to the decline in the number of households getting on the housing ladder, usually by way of a mortgage. Those who read our recent article “How affordable are Exeter properties” will understand the difficulties buyers are facing.
To discuss investing in Exeter as there are many points to consider, please come and see us at our South Street office or call 01392 254488.
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