Sherwood property market outperforms West Bridgford by almost 50%!

I've recently been doing a bit of research for an investor client of mine, who wanted some advice on where to buy his next buy-to-let property in Nottingham (he wanted to stay within the city), so I did a comparison between two very popular, but rather different areas.

The most interesting point I found, when I compared the area of West Bridgford (where the client lived) to the Sherwood area (where he already had a buy-to-let property) was that the property market in the Sherwood area had outperformed the West Bridgford area of Nottingham by 47.8%!

Let me explain why. The average price of a property in Sherwood is £144,500, so when you consider the rents that are achieved in the Sherwood area are an average of £564 per month, this gives us a yield of 4.79% per year. So is Sherwood the best investment? Well, in the West Bridgford area, where the average value of property in the area is £270,700 and the average rent is £745 per month, this gives a much lower yield of 3.24% per year. That makes the yield/ return in Sherwood 47.8% proportionality more than property in the West Bridgford area, so surely it is the best place to invest?

However, this is a great example of annual yield/return not being the only factor when choosing an investment property, as you should also consider how much the value of the property goes up in the long term. In the last 16 years, property values have risen on average by 100.84% in Sherwood (rising from £71, 980 to the £144,500 mentioned above), which is very impressive considering there was the 2008 property crash. However, property values for property in West Bridgford have risen on average by much more impressive 143.87% in the same time frame.

So, if you are investing in Nottingham property, do you want capital value or yield or both? Other areas, such as St. Ann’s, which offer impressive yields of 6% to 8% have only gone up in value by 66.4% since 2000. Sherwood has decent yields and decent capital growth. Demand is good as well, as in the last 31 days, 54 properties have come up for rent in Sherwood, 13 of them (an impressive 24%) have already have secured a tenant. Great demand with a balance of capital growth and yield means the landlord can have their cake and eat it.

If you would like some advice about buy to let or you are a landlord with a portfolio, please come and see me at our office on Queens Road (right next to the new train station entrance).