Feltham’s property market outperforms Teddington’s by 71%!

A couple invited me for a coffee last week to discuss what they should do in terms of buy to let. They’d read the Teddington Property Blog and so wanted to see what research I could do for them on their ideas for investing. They used to live in Feltham but had managed to, in the last 2 years, move across to the more upmarket Teddington. They have inherited a nice lump sum and so were keen to take advantage of the investment opportunities within property. They were undecided about which of their familiar surroundings to invest in; Teddington OR Feltham. I reminded them that one of the most important considerations you will have to make before investing is considering the balance between annual return/yield and the annual value increase/capital growth of the property that you buy.

Teddington is one of the most sought after places to live in in the borough of Richmond. There are 10,091 households here and an impressive 6875 of those households (68.1%) in Teddington are owner occupied. However, only 2041 of those households (or 20.2%) are privately rented. Teddington has many different types of housing, but one of the most popular are the 1960’s two bedroom flats, which sell for around £445k (although there are some rather more expensive ones in some parts of Teddington) and rents are on average £1455 per calendar month. Feltham, on the other hand, is a different story altogether. Only 5392 of the 10416 Feltham households are home owners (51.8%) and surprisingly only 1656 private rental properties (15.9%), the rest being made up of local authority owned housing.

With this in mind, I carried out some further research and found that two bedroom flats in Feltham have actually outperformed those two bedroom flats in Teddington. This is because in Feltham, two bedroom flats have been selling on average recently for £230,000 and the achievable rents have been £1050 per calendar month. The yield which could be achieved from property in Feltham is therefore around 5.5% gross per year. When we compare this to the possible 3.9% per year yield on Teddington, that yield/return is 71% proportionally higher in Feltham than Teddington!

We must remember however that yield is not the sole consideration when investing in Buy to let properties. Areas which offer better yields (i.e. Feltham), normally suffer from lower capital growth (i.e. don’t go up in value as quick as the ‘more desirable’ areas.) Looking at average property values in Teddington back to 2000, the average property has risen by 275% to today. However, average values in Feltham have risen by 240% in the same time frame, so, although not a huge difference, still less.  It just goes to show, do you want yield or do you want capital growth when investing in buy to let property?


If you would like more information on investing in Teddington’s (or Feltham’s!) property market, please contact me on 0208 398 9333 or rebecca@rebeccasmithpropertyservices.co.uk, visit the Landlord blog www.teddingtonpropertyblog.blogspot.co.uk or follow the blog on twitter @Rent_Teddington. 

Rebecca Smith
http://www.rebeccasmithpropertyservices.co.uk/