Bradville property market outperforms the Loughton property market by 102%

I recently had a conversation with a landlord who lives in Shenley Church End, who took me up on the offer of an informal chat about the Milton Keynes property market the other week after he read the ‘Milton Keynes Property Blog’.  We got talking about investing in Milton Keynes property and how different areas of the town performed against other areas. Investing in MK property is a balancing act between capital growth and yield. On the one hand going for strong capital growth seems an obvious choice because of the potential to generate long term capital profit, especially with inflation eating away at our savings. However, rental yields on high capital growth properties tend to be low meaning if you are taking a high percentage mortgage, the rent doesn’t pay the mortgage payments.

 

 

 

It became really interesting when we compared the area of Loughton, which is next door to Shenley Church End, against the Bradville Estate, where he was brought up many years ago. In the Loughton area, a very nice four bedroom detached house will sell for between £380,000 and £430,000 and rent for between £1,350 and £1,550 per month.  This would give our landlord a yield of around 4.2% per year, very reasonable indeed.  Until you consider those one bed town houses in Bradville, which sell for around £84,100 and let (depending upon condition) for around £600 per month, giving a yield of 8.5% per year. That means yields in Bradville are 102% proportionally higher than those achieved in Loughton.

 

However, as I said a few weeks ago, yields are not everything in property investment. Another is how the value of the property goes up over time. Better properties in better locations don’t have the best yields, but their property values tend to go up quicker over the long term.   The average value of property in Bradville, since 2004/2005, has risen by 8.3% whilst average values in Loughton during the same time frame, have risen 27.5%. 

 

 

 

Now I know there aren’t many landlords who would buy a large 4 bed detached in Loughton to rent out and there are many risks in buying a small one bed house in Bradville to rent out. It’s just that looking at the Milton Keynes property market as a whole and in more depth enables me to give you the best advice and opinion to help you find the best investment property to suit your individual long term goals. It is in your interest that you buy a property which will rent well, and for long periods of time. If you would like any advice on choosing properties, please come and see me at our offices on London Road in Stony Stratford.