Bushy Hill or Merrow Park? The answers may surprise you.

Last week, a couple from the Merrow Park development, in Merrow, wanted to discuss their interest in investing in property for Buy to Let and were therefore considering making a purchase on the neighbouring Bushy Hill Estate, where they had heard they could potentially make an excellent return. 

One of the most important considerations you need to make before investing is your attitude towards the balance between annual return/yield and the annual value increase/capital growth. 

Merrow had remained a relatively small settlement up until the 1950s, when the Bushy Hill estate was built. This development of a several hundred houses was originally all council-owned, but since the 1980s, many properties have passed into private ownership.

Bushy Hill built in the 1950s

Further expansion occurred in the mid-1980s. In the green-field site bordered by Burpham, the Bushy Hill estate and Clandon Park, the Merrow Park development was built, completely surrounding the old houses on Merrow Street. Comprising several hundred houses and flats, Merrow Park is often considered a community in its own right as it has its own shops, school and doctor's surgery.

Merrow Park built in the 1980s

Merrow Park, along with the developments, Weylea and Weybrook built in Burpham and also built during the 1980’s, adhere to the principle of delivering high quality housing with pleasant surroundings and access to good schools plus transport links. Merrow Park has therefore become a sought after place in which to live, on the edge of Guildford. 

Our initial assumption was that Merrow Park would have offered a lower yield but have experienced greater capital growth, over recent years so what did our research tell us?

The average price for a three bedroom semi-detached house on the Merrow Park development is £410,083 and rents for this type of property are approximately £1,495 per calendar month.

Similar sized three bedroom semi-detached houses on Bushy Hill have a slightly higher average price of £446,150 and the average achievable rent for these is £1,695 per calendar month. They are therefore slightly more expensive to purchase and to rent than similar sized houses on Merrow Park.

The yield generated from a property on Bushy Hill is less than expected at around 4.4% per year whereas the potential yield is 4.1% on Merrow Park, so the yield on Bushy Hill is typically 7% higher than on Merrow Park. However, we must remember that our objective is to look at both yield and capital growth when investing in Buy to Let properties. 

The average value of a three bedroom semi-detached house on Bushy Hill in 2002 was £194,400. This has risen by 195% in the last 13 years. A three bedroom semi-detached house on Merrow Park in 2002 was slightly higher, at £203,950 but the capital growth has been slightly lower, at 176%. Bushy Hill has therefore experienced 11% higher capital growth, than Merrow Park.

These figures therefore suggest our initial assumption needs to be re-considered because they confirm that in this instance it may be possible for our couple making the enquiry, to achieve both a higher yield and greater capital growth on Bushy Hill compared to investing on Merrow Park. 

After further consideration this may not be so surprising as it may have first seemed, as one considers the popularity of property in Merrow and the growing demand for ex-council properties, which has driven up the price of property on Bushy Hill to enable it to outperform its neighbour, Merrow Park. 

However as stated earlier, Merrow Park has a much greater variety of properties (one bed flats to 5 bed executive homes) so it will always attract interest from a much wider audience of house buyers, which should consequentially continue to drive prices up, as the years go by.

If you would like to have a chat about property prices in Guildford or a general discussion on investment opportunities in the area your call will always be welcome. Phone 01483 320207 or email richard@guildfordpropertyblog.co.uk