Wednesday, 5 November 2014

Showfields property market outperforms Rustall by 42%

I was talking to a couple last week, who are considering becoming landlords for the first time after they had come into some money knowing the return they would get investing in the Bank. They have lived in Royal Tunbridge Wells all of their lives and wanted to buy something in a street or area that they know well.  They were looking for advice upon what they should buy.

Their budget was in the £200,00 region, so I initially looked at terraced houses in Rustall. The average value of a two bed property in the Rustall area is £201,600 (although the price range is quite wide and they can go as low as £180,000 bringing them just into our price range but as high £230,000).  The two beds rent on average for £853 per month, giving us an average yield of 5.07%. 

Then in true “Escape to the Country” tv style I showed them a “mystery property” which was a one bedroomed flat in the Hunter’s Court development on Showfields Road on the Southern edge of Royal Tunbridge Wells.  Built in the 1960’s with looks that only a mother could love these one bedroom apartments sell well and let well achieving £595 per month rental and selling for on average £98,700 giving a yield of 7.23% a year. The yield on Showfields is proportionally 42.6% more than Rustall’s and at this price they could buy two and achieve a gross rent in the region of £1,200 per month.

However, to judge a rental investment, you must consider the capital growth as well as the yield. Since 2001, the average Showfields flat has risen by 50.1%, whilst terraced houses in Rustall have risen by 174% - quite a difference. Ultimately, we found both places to be a good investment depending on your own situation, but as you can see, Showfields Road/Hunter’s Court does offer better yields, but at the expense of capital growth which Rustall’s terraced houses  offers.  


If you are a landlord, new or old, we’re certainly more than happy for you to pop in and see us at our offices on Vale Road for a chat or email me direct on david.rogers@martinco.com

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