The Tale of Two Estates - Bellfields and Park Barn

Affordability and lack of homes are an ever increasing problem in the South East and especially in towns like Guildford. There are in excess of 2300 people on the housing waiting list so it is with this thought in mind that this article takes a look at both the Bellfields and Park Barn estates. 

These are two examples of the last major developments built to provide social housing for the many people requiring accommodation, as a part of a post war housing strategy to deliver affordable rents for those unable to afford their own home because they were in low income jobs or unemployed.

Now the housing structure is changing. Firstly, Margaret Thatcher initiated a policy in the 1980's to enable people to purchase their council house at a discounted price if they had lived there and paid rent for more than 5 years. This was a major vote winner for her because it created many more owner occupied homes allowing those with aspirations to move onto the property ladder even with low incomes. Its popularity left far fewer houses for those that remained on the waiting list for social housing.

This problem has been exacerbated by investors purchasing social housing owing to its competitive pricing and reasonable sized rooms with scope to add extensions to provide additional rooms to rent out. This has therefore reduced an ever dwindling stock of properties available to house those in need of accommodation.

However investors do tend to offer their accommodation to sharers therefore addressing the requirement for affordable accommodation for the young and single people. Furthermore some landlords are happy to rent their properties back to the local council so that keyworkers plus families including single parents and those unable to find a job, can be housed.

So while the local housing stock is desperately short in supply ex council houses do still serve their purpose to hold up the housing market but perhaps not to the same degree as they used to.

So returning to the comparison between the Bellfields and Park Barn estates what is happening to prices and rentals for privately owned properties in these locations?

Bellfields is a suburb in the north of Guildford lying adjacent to Slyfield Industrial Estate and Stoughton. The area is home to Christ's College senior school and Pond Meadow special needs school. The streets are all named after trees e.g. Cedar Way, Fir Tree Road, Juniper Close, Laburnum Close, Larch Avenue, Lime Grove and Willow Way, for example.

Park Barn is situated adjacent to both the Surrey County Hospital and Surrey Research Park and is not far from the University of Surrey so provides housing for local employees and university staff and students too. 

The Surrey Advertiser newspaper once described Park Barn as "one of the most deprived areas of Surrey" in the 11 September 1998 publication and in October that year reported Park Barn as coming 28th in the county's league table of 30 deprived areas but the area has improved and offers homes to a substantial number of residents. 

There was talk of a railway station being built in the area to relieve congestion. This is the article http://www.getsurrey.co.uk This could bring in more companies and workers to boost the local economy.

Park Barn Estate is home to King's College, a school for 11 to 18 year-olds, whose exams results have improved dramatically, over recent years. There are several primary schools in Park Barn, including Guildford Grove School, which has a specialist sign-supported rescue base on the site which supports pupils with profound hearing impairments.

The average price for a three bedroom semi-detached house on the Bellfields development is currently £375,950 and the market rental for this type of property is £1,495 per calendar month.

Similar sized three bedroom semi-detached houses on Park Barn have a slightly lower average price of £335,150 and the average achievable market rental for these is also £1,495 per calendar month. 

Typical properties on Bellfields and Park Barn estates

The gross yield generated from a property on Park Barn is around 5.3% per year whereas the potential gross yield In Bellfields is 4.8%, so the yield in Park Barn is typically 10% higher than in Bellfields because house prices are slightly lower in Park Barn. 

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 Park Barn in 2000 was £125,995. This has risen by 266% in the last 15 years. A three bedroom semi-detached house on Bellfields in 2000 was higher, at £170,150 but the capital growth has been lower, at 221%. Park Barn has therefore experienced 20% higher capital growth than Bellfields over the last 15 years so the price gap has narrowed considerably between the two areas.

Last year overall sold prices in Park Barn were 21% up on the previous year and 30% up on the 2007 level of £224,602. Sold prices in Bellfields over the last year were just 3% up on the previous year and 13% up on the 2007 level of £329,960 so as one can see the gap has narrowed even further. 

It would therefore appear that while Park Barn might have been challenged regarding its economic status, according to The Surrey Advertiser, it could be the place to invest if one is looking for a more substantial gain, while prices continue to rise at a faster rate in Park Barn than in Bellfields.

If you want to discuss opportunities for investment in these areas then your call will always be welcome. Phone 01483 320207 or email richard@guildfordpropertyblog.co.uk