ST1 vs ST6 Apartments

With inflation recently falling to just 0.3%, and most experts and the bank of England not forecasting any change to the current 0.5% interest rate until spring of 2016, we at Martin and Co are seeing increasing enquiries from ordinary people considering property investment for the first time.

For many savers, the combination of an extended period of very low interest rates and therefore poor returns on their money, combined with an increasing confidence in the property market, relatively affordable property, and strong demand, it is easy to see why new investors are looking to the rental market in Stoke on Trent and Newcastle under Lyme.

For many new investors, the prospect of buying an old property which may need costly repairs and maintenance is not appealing.  Many with no previous experience in the property market are instead looking at new build houses and flats to provide them with a better return than their banks on their savings.

A couple looking for a buy to let investment recently came into our offices.  They were trying to decide between two new build properties which were up for sale, one in the ST1 area of Wilton Court, and the other at Sunnybank in Burslem.

Both of these areas are popular with renters as they have a large number of new build flats and houses, and are therefore sought after by couples looking to move in together, as well as people relocating to the area for work.

Martin and Co Stoke on Trent offer lettings services for the majority of owners at Sunnybank.  This came from our involvement with the builder when these properties were first constructed eight years ago, and whilst most have now been sold to new owners, many have retained Martin and Co as their agent.

There are two types of apartment at Sunnybank, with a few large two bedroomed flats, and a majority of two bedroomed flats with one small bedroom/study and one double bedroom.  With the smaller flats selling at around £70,000, and a rent of £400 per month, these will generate a 6% return.  Renting for £465 per month, but costing £80,000, the larger flats generate a 7% return.

The Wilton Court two bedroomed flats are more sizable, with two similarly sized rooms which makes these more appealing to sharers.  You would generally expect to pay around £80,000 for one of these flats which will rent at £495 per month, which again generates a 7% return.

Our prospective investors were looking at rental properties in order to generate a better interest rate than the bank on their savings, and with yields of 6 and 7%, these new build properties clearly make good rental sense, and both areas see strong tenant demand and good rental returns. 

Whilst you will still need to account for the costs of finding tenants, repairs, maintenance and ground rents, new build properties are appealing as they generally need less maintenance than an older property, and over the long term, we would also expect to see some capital growth in addition to the monthly yield.

We at Martin and Co are experts on the local property market in Stoke on Trent and Newcastle under Lyme, and manage a large number of properties on behalf of our landlords and investors.   We are able to advise prospective landlords on the rental performance of particular properties on areas, based on historical data, and our own experience.