It was interesting to see the house price forecasts recently published by
Savills. They predict a rise of 19.3% over the next 5 years for UK house prices. All well and good there. However, what was particularly of interest is that the highest “regional performance” will be South East at 26.4%, East of England at 25.2% and East Midlands at 19.3%.
We have long preached the benefits of investment in “East Midlands and the East of England”; areas such as Peterborough, Kettering, Northampton and the Rutland market towns of Oakham and Kettering. We believe in the local economies of these areas, their employment prospects, their proximity to London and the consequential flow of wealth.
However, this is only part of the equation of an investor’s total return. The other half of the equation is the rental yield. House price forecasts only take into account the capital appreciation potential. It is imperative that landlords also consider the running yield on their properties. By combining yield (or rental return) with capital appreciation it gives the total return.
Generally speaking we can expect higher rental yields in the East Midlands and East of England than in the South East; largely due to the higher absolute price of properties. Therefore, we would argue that the total return over a 5 year period could (or should) be higher in the East Midlands and East of England than anywhere else in the UK.
So a good investment prospect for our local area. As always, it is imperative investors seek the best advice on such a large investment and that once purchased the asset is managed with the utmost care.
At Osprey Lettings we can assist investors with the purchase of investment properties; no fee, no commitment, impartial advice. Even more importantly, through our parent company we manage in excess of 750 properties and pride ourselves on the quality of our lettings and management service.
Do please call us to discuss.