Capital growth or yield?

A couple came into our office this week looking to purchase another buy-to-let in Exeter.  

They already have three other properties in city and are getting a good monthly return, however as the properties are of relatively low value, they are concerned that the capital growth they will be getting may not be enough to cover their future plans, especially as they are currently on interest only mortgages.

I decided to look into the areas of Exeter that have achieved the greatest capital growth over the last six months, although this is a relatively small time period to make an accurate judgement on a market, it does show the current demand and trend.

Interestingly EX1 came out on top of the list, with an increase of just over 6.8%.  EX1 encompasses the city centre, Heavitree, Whipton, Monkerton and half of Pinhoe.  These areas are not known for their particularly high house prices, the average property price is currently just over £232,000, however as there are a large proportion of terraced properties (around 36.5% of the housing stock), they lend themselves well to the investment markets and buy-to-let landlords.  The area has excellent access routes and public transport so it is ideal for people working in and around the city.

The area with the lowest capital growth over the last six months is EX2, at around 5.85%.  EX2 covers a large area, from Dunchideok through Alphington, part of St Thomas, Countess Wear, St Leonards, St Loyes and Broadfields to Clyst Heath, Digby and Sowton.  Similarly to EX1, this area has excellent transport links and a wide variety of housing stock so it suits many different types of households.

The decision of where this couple should buy could be very different to where you should buy; it is linked to your personal position and requirements.  Therefore, if you are looking to buy an investment property in Exeter, come and talk to us so we can look at the best place for you.

A few facts about the property market around Exminster

A landlord who has invested in rental properties throughout Exeter asked me about the property market in her home village of Exminster.

Exminster and the surrounding areas are highly sought after , due in part to the beauty of the surroundings, relaxed lifestyle and wide open spaces. Many people purchase second homes in the area and it is also highly popular with retired people. 

The most popular types of property in Exminster are detached houses, making up nearly 48% of all available properties. This reflects the area’s popularity with families with children. In comparison, the least common type of accommodation is flats, which make up only 5.6 per cent of the market. It can be difficult for first time buyers in the area, as there is a distinct lack of new affordable housing. 

Unemployment is low in the area and many people living here are generally affluent, living in villages and commuting to towns and cities, such as Exeter and Plymouth. 

In EX6, some of the highest priced streets to live on are Haldon Drive, Lumley Close, in Kenton, and Castle Gate, also in Kenton. In these roads, house prices are on average, about £550,000. Some of the most affordable streets in the area include Kenton Mews, again in Kenton, Courtenay Terrace , in Starcross, and Alexandra Terrace, also in Starcross where prices average at about £110,000.

If you would like to discuss property in your area or where you are looking to invest, please come and see us at our office on South Street or call us on 01392 254488.