When purchasing a buy to let property, there are two ways landlords make money through property letting
– capital growth and rental income growth.
A landlord from London, who has a number of properties in both Derby and Nottingham, asked me a few weeks ago about the difference between Derby and Leicester housing markets. He was focused on capital growth but als
o wanted to ensure his yield was relatively fair. I was quite surprised with my findings and wanted to share them
The average property price in Derby is currently £189,000. In the last 3 months property values in Derby, according to my calculations, have dropped by just over 0.8%. Whilst in Nottingham, average property prices in Nottingham are £184,000, having dropped by 0.4% in the last 3 months. Therefore, is Nottingham the better bet?
Well, not necessarily.
Over the last 5 years, property values in Nottingham have risen by 20.5% and in Derby by 25.1%, meaning over the last 5 years, property values have increased at a 23% quicker rate in Derby compared Nottingham’s. But then there is question of yield, as Derby also normally has slightly higher yields than Nottingham, but Derby’s rental market can be quite fraught.
Each Derby (and Nottingham) landlord will have different needs and requirements in his or her property investment. If you want an unbiased opinion on what (and what doesn’t) make a good property investment. Knowing what has happened to values in different cities, enables us to spot any trends or opportunities for buy to let landlords.
If you would like to discuss my thoughts on the rental markets, feel free to send me an email to firstname.lastname@example.org