Rental yields in Colehill versus property prices. I was asked to give a property appraisal last week, for a chap in Colehill, who was interested in discussing the differences and benefits of buying and selling his property, versus letting it out. As he was not an established Landlord, I thought others might like to benefit from my research too.
One of his concerns was the expected, continued boom in the property market, and so would there be a demand for tenants?
There are plans, of course, to build more new houses in the area, but some in the local community have voiced concerns about the disparity between “affordable housing" being built, and the reality of that not so affordable housing.
Councillor Susan Davies says:
"Colehill Parish Council has always advocated developing housing to meet local needs, particularly affordable and social housing. In fact, the likelihood is that the vast majority will be “open market” housing as developers will want to maximise profits on the available land. This will keep house prices high in area that is already known for high property values, doing nothing to assist those on average or below average income. “
The average property value in Wimborne and Colehill is approximately £296,900, and the average salary in Wimborne is £26,096. This gives a ratio of 11:38 (the average UK ratio is 9.5:1)
What does this mean?
This means that prospective First Time Buyers are expected to raise deposits of 5%(approx £14,845 EXCLUDING fees) this is a lot of money for people to find, especially those on reduced or low incomes.
I have made a little chart to show the average property prices, and the average expected rental income. Don't forget that on average a rental property will be on the market for about 2 months, in the WImborne area. I have included the reduction in income to take this into account.
Tenants inability to raise the deposit money for a property purchase, is actually driving demand for rental property. By researching what sort of housing mix is in demand in the area, and what sort of rents are possible, a good yield is very achieveable, from property investment in Colehill.