Partner Article

Planning policies can significantly affect property values in Jesmond, according to GFW

GFW Research, part of the George F. White Group, has released a report on the Jesmond lettings market,

The report highlights a significant difference in rental returns and capital values depending on a property’s status.

The research has found that property values in Jesmond can be significantly affected by a planning policy which is often overlooked by prospective purchasers.

GFW found that in place across parts of Jesmond, it appears to be creating a two-tier property system which is now beginning to emerge and has the potential to significantly reduce an investor’s rental return and capital value.

On certain streets, this translates to a difference of over £100,000 between family homes and houses with multiple occupancy (HMO), e.g. student accommodation.

GFW Research has revealed that investors are achieving an additional £5,000 per annum rental if they are able to let to three or more unconnected persons, rather than a family and a couple.

Director of GFW Letting, Holly Armstrong, said: “Jesmond remains a popular location for both owner occupiers and investors and is well known for its broad mix of student, young professional and family accommodation.

“The recent findings from GFW Research look in detail at the returns to be found in Jesmond and asks whether planning controls have caused a shift in returns and capital values.

“It shows that those properties able to let to multiple occupants are exchanging for higher values but the crux of the matter is that it is very difficult for properties with C3 status to adjust to C4 status. They are therefore less likely to benefit from the resulting higher returns, now being reflected in capital values.

“Investors need to carefully understand a property’s status and how it can impact on their investment. With these planning policies in place, landlords may have to adjust their plans in terms of who their target tenants are. It’s about being well informed and able to make the right decisions.”

This was posted in Bdaily's Members' News section by Ellen Forster .