There has been a lot of talk this year about the increase in value of properties in Watford and the surrounding areas. Not so long ago we looked at some interesting and current insights when comparing both 1 and 2 bed properties. But it has to be said that property investment works at it’s best over the long term so what has happened over the last 20 years, since the recession before the last one and what does the future look like?
Going back to 1996, the market was barely starting to recover from a prolonged period of stagnation that really started in the 80’s when there was a huge increase in unemployment, some of the earliest cases of significant negative equity and when it was pretty much a difficult time for anyyone. The 16th Sept ’92 when Conservative Chancellor Norman Lamont brought interest rates up to 15% hurting everyone and kept our beloved property market free of any inertia for at least another 4 years.
This was also pre Buy-To-Let mortgages and the build-up of the ‘small’ landlords with just one property that he/she might have inherited or acquired when becoming a couple with two homes unable to sell one off. There was also no media coverage or the positive encouragement and ‘anyone can do it’ shows such as Homes Under The Hammer!
Looking back at a couple of examples, in areas that are now pretty popular with Watford’s investors, you could buy a small 2 bed terraced property in West Watford for £42,000 in ‘95. Travelling through time to the year 2015 the same house would now sell for £280,000, if not more, showing a ridiculous 666% increase over the life of what would be considered a typical term for a mortgage – perhaps slightly less. You would have had rental income too which would have been up and down during this period, and couple with mortgage payments but current rental values would be about £1100 pcm today.
If we take a look at some of the large family house for examples a 5 bed detached house on Bushey Mill Lane, Sold in ’97 for £400k but now worth 400% more than that! Again it would be pretty tough to calculate the rent over that period over almost 2 decades but it would currently rent for around £3000 per month!
We have already mentioned you’d have to account for management fees, mortgage costs and any other associated landlords costs but you would have been making a profit from your rental income too. The big earner is always the long term capital growth when you buy well in the first place.
I am always offering advice to my existing and new landlords in Watford and the surrounding towns on what to buy (or not as the case may be). With easy access to all this information I can spot local trends, changes in the market and give my client the best possible advice and support about what’s going on right now. There is no charge for my advice as I’ve got plenty of opportunities to earn my fee by finding landlords the best tenants in the years to come. If you want to discuss what might be best for you then why not give me a call or meet me for a coffee and let’s see if I can help you.