Leighton Buzzard or Dunstable... Which is best for the Buy-to-Let investor?

Last week one of our landlords with properties in Leighton Buzzard came into our office. He had a couple of hours to pass while his wife was visiting a friend in Dunstable.

He wanted to know how Dunstable’s property market was doing, as most of his properties were in Leighton Buzzard.  He previously didn’t want to invest his money in Dunstable as he felt it wasn’t a good investment and the properties we managed for him in Leighton Buzzard had performed well over the past few years. He had been reading some of my recent articles and wanted to know more about the current market in Dunstable as it seemed to have picked up recently. So, just for interest, we looked at Leighton Buzzard’s property market and found out that on average a flat would cost around £140,000 and the average rent is around £750 per month. Property prices had risen by nearly 8% in the last year and in the last 5 years they had risen by almost 28%. He said he knew that and that’s why he bought in Leighton Buzzard. Next we showed him that the average price for a flat in Dunstable was around £130,000 and the average rent was £725 per month. This gives the average yield of 6.7% for flats in Dunstable and 6.4% for flats in Leighton Buzzard, an insignificant difference and we both agreed that at the moment the yield for flats in both towns is about the same.

We then looked at how the property prices had performed.  He told me that in my articles I had been discussing the recent increase in demand for property in Dunstable from London buyers that had been pushing up prices. This had been highlighted to me by a local Dunstable Estate Agent called Deakin White. They have established a tie-up with London Agents as this is where most of the buyers were coming from resulting in them becoming one of,  if not the most successful Estate Agent in Dunstable over the last 6 months of 2015. As we have found with renters, Ed Harrison one of the Directors at Deakin White told me that the London buyers are finding all of the towns outside of London where they would usually look to buy had now become unaffordable and Dunstable offered them good value property which was still close enough to London to commute to.

We then took a look at the property sales performance of each town by comparing the increases in property prices over the last 5 years. Leighton Buzzard had out performed Dunstable over this time with the property prices in Leighton Buzzard increasing by nearly 28% whereas in Dunstable they had increased by 26.5%.

We then took a look at more recent figures and these confirmed that Dunstable had seen an increase in demand and therefore an increase in prices. The average price paid for all property in Dunstable over the last 12 months was £231,744 and over the last 6 months it was £248,334, an increase of just over 7%. This compared to a drop of nearly 1% on the average price paid in Leighton Buzzard from £276,269 to £275,051.

In his portfolio of properties our landlord currently owns 2 properties in The Wharf in Leighton Buzzard which he purchased because of their location within walking distance to the mainline station. This has made them very easy to rent with London Commuters  resulting in no void periods over the last 3 years. With the Busway in Dunstable making the journey to Luton train station and therefore to London much easier and the recent performance of the sales and lettings market this has given him something to think about for his next investment, but I have a feeling that he has a soft spot for Leighton Buzzard. It has, and continues to be a good investment and with its mainline station will always have an attraction for the London Commuter.