Buy-to-let investors can benefit from 12% price discounts for unmodernised homes
Research by London lettings and estate agent, Benham and Reeves, shows that buy-to-let investors can snap up unmodernised properties for as much as -12.3% below the average market house price, providing a stellar opportunity for strong and relatively fast investment returns.
Benham and Reeves analysed house price data for 36,175 unmodernised properties currently listed for sale on England’s housing market* and found that, on average, they are priced -7.4% below the wider market average.
While the average house price in England currently stands at £373,156, the average for an unmodernised property is -7.4% lower at £345,504 – a cash difference of -£27,651.
Within regional markets, the discounts available for modernised homes grow even bigger.
In the North West of England, the average house price currently sits at £245,065.while the average unmodernised home costs just £215,000, marking a saving of -12.3% or -£30,065.
In the North East an average price of £149,975 for an unmodernised home is -11.2% below the region’s wider average (£168,970), while the West Midlands and South East offer average discounts of -9.1% and -8.1% respectively.
In London, the average unmodernised discount of -7.4% is equivalent to -£59,000 due to the capital’s valuable property market, while Yorkshire & Humber (-5.9%), the South West (-5.8%), East Midlands (-5.7%), and East of England (-5.6%) all provide savings of more than 5%.
Where are the most unmodernised opportunities found?
In the South West region alone there are currently 5,982 unmodernised homes listed for sale, which is equivalent to 16.5% of the national total.
This is followed by the South East (15.6%), East of England (13.4%), North West (12.6%), West Midlands (10.7%), East Midlands (10.4%), Yorkshire & Humber (10.1%), London (9.1%), and the North East (1.6%).
Director of Benham and Reeves, Marc von Grundherr, commented:
“Unmodernised properties can be snapped up at a significant discount compared to the wider market which makes them a cost effective investment for landlords who are looking for accessible ways to start or scale a portfolio.
Given the fact that the Decent Homes Standard is widely expected to soon be relaunched with tighter guidelines, many landlords are regardless going to have to start making wide-ranging improvements and upgrades to their properties. That means this is an ideal time to take advantage of the discount unmodernised properties provide.”
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