Properties In Hinkler Road Area Outperform Hedge End Housing Market By 50%

Following a discussion with a local landlord who lives in the West End area of Southampton, in the nice area between Church Hill and Chalk Hill, we got chatting about the Hedge End property market and how it was so opposite to the Hinkler Road area of Southampton. Interestingly, he had a couple of properties in both areas and, after reading my “Southampton Property Blog”, wanted some advice on where to buy next.

I did a comparison between the two and was surprised to find that the property market in the Hinkler Road area had outperformed the Hedge End market by 50%!

The 3-bed semis at the Thornhill Park Road end of Hinkler Road, built just before the war, sell for between £145,000 and £160,000 depending on condition. However, further down the road there are the local authority built properties. Often built to high standards, 3-bed terraced houses achieve around £110,000 to £120,000 and the semis for £125,000 to £135,000 (again all dependent on condition and exact location). When you consider that the rents that can be achieved for these properties are in the early £700s per month this gives us a yield of 6.5% to 7% per year. That means Hinkler Road is the best investment, especially when you consider it compared to property in Hedge End where the average value of a property is £243,500 and the average rent is £901 per month, giving us an much lower yield of 4.4% per year (around 50% more).

This, however, 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 10 years, property values have only risen by around, on average, 22% in the Hinkler Road area, which is worse than inflation. Therefore, in real terms, whilst as an investor you are achieving an excellent yield, this is at the expense of having a depreciating asset in real terms. Hedge End values have risen by 63% in the same time frame. So, if you are investing in Southampton property, do you want capital value or yield?

As we don’t sell property, we can help you to find the best investment property for you with our specialist lettings advice. It is in our interest that you buy a property which will rent well and for long periods of time. If you would like any advice on choosing properties, come and see us at our office on London Road or contact us at 023 8001 8222 or email us at southampton@belvoirlettings.com