Chesterton Property market outperforms the Newnham housing market by 128%

Following a discussion with a local landlord who lives in Newnham, we got chatting about his two buy to let properties. One of his properties is in the Chesterton area and the other in Newnham, where he currently lives. We got talking about the two properties in both areas and he wanted some advice on where to buy the next one. I did a comparison between the two areas where owned his buy to let property and was surprised to find that the property market in the Chesterton Estate area had outperformed the Newnham property market by 128%!

The average price of a property on the Chesterton Estate is £258,700. When you consider the rents that are achieved in the Chesterton Estate are an average of £1,121 pm, this gives us a yield of 5.19% per year. So is the Chesterton Estate the best investment? Well, in the Newnham area, where the the average value of a property is £1,084,300 and the average rent for a property is £2,468 pm, giving a much lower yield of 2.27% per year. This makes the yield/return in the Chesterton estate 128% proportionality more than property in the Newnham area, so surely it is the best investment, isn’t it?

However, this is a great example of annual yield/return not being the only factor when choosing an investment property, as you should also consider how much the value of the property goes up in the long term. In the last 7 years, property values have only risen on average by 31.3% in the Chesterton Estate which is very impressive considering there was the 2008 property crash. However, average property values for property in the Newnham area have risen on average by 76.9% in the same time frame.

So, if you are investing in the Cambridge property market, do you want capital value or yield?  If you would like some advice about buying to let, be you a landlord with a portfolio or someone thinking of investing in the rental market, please come and see us at our office on Mill Road, Cambridge.