In Penicuik, I am speaking to more and more landlords, be they seasoned professional landlords or FTL’s (first time landlords), as they read The Penicuik Property Blog that shows that the Penicuik rental market is doing reasonably well, with rents and property values rising.
When I was having a chat with one of these landlords over a cup of tea in Haigs Cafe the other day, he asked me two completely unrelated questions that got me thinking. The questions were, how much faster are Edinburgh property prices rising than Penicuik ones (he has properties in both places) and how much he should be paying per square foot?
Interestingly, we both thought that obviously Edinburgh property prices would be rising faster than Penicuik property prices but, going by my mantra of ‘never assume nuthing’, I did my research and was astounded by what I found.
Over the last twenty years, property values in Penicuik have risen by 238% compared to ….. wait for it ….. 238% in Edinburgh ie they have increased by the same amount.
This is an interesting result as it half turns the historical view of the capital growth vs income see saw on its head. The capital growth vs income see saw says that the higher the capital growth the lower the rental yield and vice versa.
However, the property values research I did means that capital growth been the same in Edinburgh and Penicuik but your investment money also goes further in Penicuik as properties are cheaper meaning there will be higher a rental yield – in Penicuik you can get easily 6-8% whereas in Edinburgh you are lucky if you get 5% per year.
So looks like ‘you can have your cake and eat half of it’!
What about the ‘how much he should be paying per square foot’ question I hear you say? Well, that’s a topic for a future blog post .... watch this space.
Whether you are a landlord, a ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit The Penicuik Property Blog (www.thepenicuikpropertyblog.co.uk), contact me for a chat (phone on 01968 674601), come and see me in my office (6 Bank Street, Penicuik) or email me (email@example.com).