Thursday, 17 July 2014

Seaham Shock! Parkside Outperforms East Shore Village by 70%

Last week, a nice couple who owned a property in the East Shore Village development in Seaham came in to discuss potentially investing in a similar property as a Buy to Let

As I discussed with them, one of the most important considerations you will make before investing is the balance between annual return/yield and the annual value increase/capital growth

East Shore Village was built on the old Vane Tempest colliery site from 2005 onwards and is a mix of around 600 Yuill and Miller Homes and a smaller number of impressive detached self-build homes. It is one of the most sought after places to live in Seaham

The average sale price of a typical three bedroom semi-detached house on Alnmouth Way, East Shore Village is £138,916 and rents for this type of property are on average £595 per calendar month

With this in mind, it was a surprise to find that similar sized three bedroom semi-detached houses in the ex-council Parkside area have massively outperformed those on East Shore Village

This is because a three bedroom semi-detached house on a typical Parkside street such as Parkside Crescent can be bought for around £58,500 and the average rents on that street is currently £425 per calendar month 

The Gross Yield which could be achieved from property on Parkside Crescent is around 8.7% per year. When we compare this to the possible 5.1% on Alnmouth Way, it is 70% higher on Parkside Crescent

However, we must remember that yield is not the sole consideration when investing in Buy to Let properties and that capital growth is equally important

The average value of a three bedroom semi-detached house on Parkside Crescent in 2005 was £77,316 meaning homes there are worth nearly £19,000 less today than they were in 2005.  The average price of a brand new three bedroom semi on Alnmouth Way was £125,912 in 2005, meaning rather than suffering a heavy loss, their value has increased by 10% in the same period

If you would like more information on investing in the Seaham or Sunderland property market, please call me on 0191 567 8577 or drop me an email to neil.whitfield@belvoirlettings.com

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