A landlord popped into my office in Bank Street the other day to have a chat about buying a property in Peniciuik. He already has a couple of residential properties as well as a commercial unit that are doing very well for him and is on the look out for a third residential property. When we were talking, he asked me a question that made complete sense in terms of commercial property but was as bit ‘left field’ from a residential property point of view – how much he should be paying per square foot?
Well, that was a challenge and you know how I like a challenge!
So I did my research and found out that:
- The average flats in Penicuik are currently selling for approximately £168 per square foot costing, on average, £100,000.
- Terraced houses in the town are currently selling for, on average, £120,000 or £155 per square foot.
- An average semi in Penicuik is obtaining for £162,000 and achieving £196 per square foot.
- Finally, the average detached house in Penicuik is achieving £191 per square foot and is selling for £300,000 although this selling price is skewed by a small number of high value properties that do not make viable buy to let properties.
Now these are of course averages, but it gives you a good place to start from.
If you recall in an earlier article, my research reveals that Penicuik terraced houses tend to generate a better yield than detached and semi-detached houses (probably because they are cheaper to buy than semi-detached houses but rents as fairly similar) and flats (probably because there are not that many flats for rent in Penicuik). However, detached houses, semi-detached houses and flats tend to appreciate in value more rapidly and may well be easier to sell, simply because there are fewer being built – remember, 29.8% of properties in Penicuik are terraced houses compared to a national average of 18.6%.
So, terraced houses are the cheapest to buy per sq ft and give the highest rental yield but give the lowest capital growth. That’s interesting.