As safe as houses.

With interest rates remaining low; cash savings failing to return interest, pension schemes under performing and stocks and shares potentially risky, more people are choosing to invest their hard-earned cash in property.

There’s increased rental demand for all styles of property across South Warrington but when considering investing in bricks and mortar you must first decide your risk and return strategy. Higher risk, shorter term investments achieve higher annual returns compared with lower risk, long term investments that will increase in capital value at a higher rate.

Often lesser value properties achieve higher yields. When considering a standard two bed terrace house in Latchford, an investment in the region of £90,000 would achieve a rental of £500 pcm gaining a 6.7% yield however in Stockton Heath a similar property in the region of £180,000 would achieve £700 pcm gaining a significantly lower 4.6% yield. While higher end detached houses may only reach up to a 3% return on investment given the rental ceiling price.

The length of tenancy also impacts, with short term rentals resulting in potential void periods, increased maintenance and re-let fees, affecting your annual return. Young high earning professionals seldom remain tenants for long proceeding to purchase their own properties whereas lower earners and families who settle children in school remain in longer term tenancies.

Investments in more affluent areas will benefit from higher increase in capital value with increased house prices. Considering a two bed terrace again in the last 3 years have increased on average, in the region of 12% in Latchford whereas in Stockton Heath by 22%.

To ensure your next investment is as safe as houses feel free to give Ashtons a call to discuss the local market.