Stoke on Trent offers really good value homes

First-time home buyers and investors might be well served to browse the ‘for sale’ notices in Stoke-on-Trent, one the five least expensive places in England and Wales.

According to the latest figures from the Land Registry, at present the average purchase price of a home there is just under £70,500. The only cheaper spots are Hull, Merthyr Tydfil and Blaenau, Gwent.

Earlier statistics showed that over the past ten years, house prices in Stoke-on-Trent actually doubled; as Land Registry figures show an average price of just over £39,000 in December of 2001. Prices peaked in 2007, with the average in December of that year at about £91,530, but since then the recession has driven them back down to the current average of £70,457 as of last year’s end.

Over the year from December 2010 to December 2011, house prices in the city dropped by about 4.4%, but that was a minor fluctuation compared to some areas such as Hartlepool, where the average price fell by 17.5%. Stoke-on-Trent, while not seeing dramatic rises in home prices, also hasn’t seen dramatic decreases; forecasters don’t expect this situation to change in the near future.

Nigel Dickin, partner at the estate firm Butters John Bee, said his agency has noted an increase in the number of sales in Stoke-on-Trent, with the percentage of buyers from the local area just about equal to that from out of town. He said the outside investors are looking at the area as offering good return on rental property, i.e. the ratio of purchase price to rental income.

Separate research from consultancy KMV Research confirms that in Crewe and Nantwich, for example, average advertised purchase prices are around £182,500 and the average rent is £552 – which means the profit margin is only about 0.3 per cent. In the case of Stoke-on-Trent, with the average cost at £70,450 and the average rent at £473, the profit margin comes up to 0.39 per cent.

There is additional input from the Hanley Economic Building Society; head of risk David Lownds says that mortgage applications are on the increase also, up 23 per cent in the four months from September 2011 on the same period in 2010. He says they are also seeing more potential buyers coming in with a stronger position in terms of down payment. He commented that “. . . if you’ve got a five per cent deposit and you’re confident in your job, it’s a good time to buy.”

As a case in point, one buyer from Rugby, Richard Halfacre, bought a mid-terrace in Tunstall for £38,000, mostly because of the cheaper price. Another buyer who had failed to find anything affordable in Newcastle or the Staffordshire Moorlands found a house in Great Chell for £95,000, and said he got more for his money than he could have anywhere else he looked.

With the cost of a home around £160,380 for the whole of England and Wales averaged together, the cost in Stoke-on-Trent looks very attractive indeed. The prediction is that prices will not vary much over the next year, and that interest in the area will continue to grow as a result