Yes, that’s correct. On average, since the start of the turn of the millennium, homeowners in the Bath area have seen gains at an average of 8% growth year-on-year.
A ‘steady as she goes’ restriction in house price increase has been seen over the last few years since the pandemic hit, and this is likely to continue beyond 2024. However, we must look at the LONGER term. As much as we love to look into the short-term gains, the housing market is a medium to long-term investment for many people, so it is important to look at the house prices over this time. So, let’s look into the numbers:
ALL HOMES – (2001) £156,197 –> (2024) £442,791 = +£285,594 (8%/Yr)
APPARTMENTS – (2001) £116,254 –> (2024) £314,394 = +£198,140 (7.4%/Yr)
TERRACE/TOWNHOUSES – (2001) £139,962 –> (2024) £494,790 = +£354,828 (11%/Yr)
SEMI-DETACHED – (2001) £193,857 –> (2024) £402,413 = +£208,556 (4.7%/Yr)
DETACHED – (2001) £320,152 –> (2024) £643,462 = +£323,310 (4.4%/Yr)
Now, when looking at these numbers it is easy to forget that there has been 79% inflation over those 23 years, which eats into ‘real’ value. So, taking that into account, the real gains are as follows:
ALL HOMES -> +£158,928 (£6,910/year)
APPARTMENTS -> +£110,262 (£4,794/year)
TERRACE/TOWNHOUSES -> +£197,456 (£8,585/year)
SEMI-DETACHED -> +£116,058 (£5,046/year)
DETACHED -> +£179,917 (£7,822/year)
So, after inflation has been accounted for, the annual profit for an average Bath home stands at £6,910. This also shows that despite events such as the 08/09 credit crunch, which saw house prices plummet by over 15%, homeowners in Bath have still faired well over the longer term.
SO WHAT ABOUT BATH LANDLORDS?
Even though the number of landlords liquidating their property portfolios has increased in the last couple of years and the number of landlords buying is lower than in the 2000’s and the 2010s, there is still net growth in the size of the private rented sector each year. The simple fact is many Bath landlords remain keen on expanding their property portfolios for the longer term, despite current higher tax rates.
Alongside this, the younger generation sees renting as a choice that offers flexibility and alternatives that homeownership does not provide. This means that demand for rentals will keep growing, allowing landlords to enjoy rising rents and capital appreciation.
However, Bath Buy-To-Let Landlords must adopt a more thoughtful strategy to maintain a good return on investment. With changing laws around taxes and the balances in power, achieving returns similar to that of the last couple of decades requires more effort. If you are seeking advice on a long-term goal you have in mind for your property portfolio, then get in touch with our team here.
