Most of the investors I talk to are looking for smaller units for their property investments. This is because they are cheaper to buy and usually provide a better yield and hence a better return on investment. But it is worth considering the larger properties too. I was discussing 3 bed semi’s on the Knutsford Estate with a new investor last week. She already lived on the estate and owned 2 properties there and was considering buying a third one.
The Knutsford Estate is a very popular area with nice wide suburban streets, large houses and plots and a very different feel to the surrounding terraced areas. There is also Knutsford School which has an overall effectiveness rating from Ofsted of ‘outstanding’ making the area even more popular with people fighting over properties to buy or rent so they can get their children into one of the best primary schools in Watford.
I decided to look at prices in a ¼ mile radius in the Knutsford Estate and found that in Q4 2013 you could buy a house in this area for an average price of £293,741. I compared this to Q4 2014 and found that the average price was £373,272 which is an increase in price of 27.4%. If you compare to this to an average increase of 14.57% in the last 2 years (according to Zoopla) it’s substantially above average!
Unfortunately yields have not kept up with the increase in price in this area. The average asking rent back in 2013 (Q4) was £1,330 with the equivalent rent in 2014 (Q4) being £1,550. This means the average yield has dropped from 5.4% to 4.9% which to be fair is still good for a freehold property in Watford but nevertheless is less than it was just over 12 months ago.
If you are thinking about a property investment in Watford and Knutsford seems like a good option for you then you may have your work cut out! Houses fly off the market rapidly in this area at asking price so you need to get in quick. Based on the above figures you’d be nuts not too!
If you’d like to discuss your first, second or fifth property investment in Watford then I’d be delighted to have an informal chat with you about what might work best for you. You can reach me on 01923 375 300 or james@caleyandco.com.