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Cheltenham Buy-to-Let Guide

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    Everything You Need to Know About Cheltenham Buy-to-Let

    Cheltenham is known for period architecture and horse racing, so you may have already guessed that it’s not the cheapest option for investment property. Also known as Cheltenham Spa, this Regency town is located in Gloucestershire, South West England.

    If your property search has drawn you to Cheltenham, you may be wondering how the town’s buy-to-let investment scene stacks up to other areas.

    This guide will provide you with everything you need to know about Cheltenham buy-to-let property in 2024.

     

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      Cheltenham Aerial View

      Buy-to-Let Property Prices in Cheltenham

      According to Rightmove, the average price of Cheltenham property was £404,299 over the past year. This is substantially more expensive than the UK average of £291,044, as stated by the UK House Price Index, but it is still cheaper than the London average of £535,597.

      Cheltenham’s average property price is 3% higher than the previous year and 11% up from 2020. Overall, the UK property market has been sluggish over the past year, and this has been particularly pronounced in the South of England.

      But is this subdued market likely to continue? Property expert Savills predicts that the South West region will return to healthy growth from 2026 after a slight dip in 2024, followed by modest growth in 2025.

      Further reading: If you want to learn how to buy property in the UK as a foreigner or about buying a house through a company, take a look at some of our latest guides.

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      Cheltenham bridge

      Buy-to-Let Rental Market in Cheltenham

      According to housesforsaletorent.co.uk, the average rent in Cheltenham is £1139. This makes Cheltenham cheaper than the UK average of £1283, as stated by HomeLet, but not that far off.

      The BBC states that rents for new lets in Cheltenham have increased by 8.7% on average from January 2022 to January 2023. This follows the nationwide trend towards rapidly increasing rents in response to the extreme supply-demand imbalance currently observed in the UK rental property market.

      There’s also the potential for targeting student tenants, as the University of Gloucestershire has two campuses based in Cheltenham and one in Gloucester, with a combined student population of over 19,000.

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      Cheltenham river park

      Buy-to-Let Investment in Cheltenham: Area Breakdown

      Central Cheltenham can offer different property types, including period properties and good access to amenities. It’s also popular with students who want to be close to the town’s campuses. The town centre is home to districts like Lansdown Crescent and Montpellier.

      There are various districts surrounding the town, such as the popular Charlton Kings and Leckhampton to the south, St. Mark’s to the west, and Prestbury to the East. If the location is chosen wisely, some good deals can be found in Cheltenham’s surrounding residential areas.

      Further out, there are towns such as Gloucester that are popular with Cheltenham commuters thanks to the lower rent and cheaper property that can be found there.

      Lansdown Crescent

      Average Property Prices in Landown Crescent

      The average property price in this area is £380,946.

      Average Rental Yield in Landown Crescent

      The average rental yield in this area is 3.35%.

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        Cheltenham church

        Charlton Kings

        Average Property Prices in Charlton Kings

        The average property price in this area is £538,864.

        Average Rental Yield in Charlton Kings

        The average rental yield in this area is 2.54%.

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        Prestbury

        Average Property Prices in Prestbury

        The average property price in this area is £432,606.

        Average Rental Yield in Prestbury

        The average rental yield is 3.14%.

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          St Mark’s

          Average Property Prices in St Mark’s

          The average property price in this area is £336,146.

          Average Rental Yield in St Mark’s

          The average rental yield in this area is 3.89%.

          Cheltenham street view

          Gloucester

          Average Property Prices in Gloucester

          The average property price in this area is £276,977.

          Average Rental Yield in Gloucester

          The average rental yield in this area is 6.65%.

          (Average property prices were taken from Rightmove in late 2023, and rental yield estimates were calculated with figures from housesforsaletorent.co.uk in the same period)

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            What is the Best Area of Cheltenham to Invest in?

            Housing in Cheltenham is on the pricier side, which translates into lower rental yields generally for local property. Property that is cheaper than the Cheltenham average can be found in the town centre, such as in Lansdown Crescent, and in some surrounding districts like St Mark’s, but the yields are still not that promising on the whole.

            However, the nearby Gloucester is the top area in the South West region when it comes to rental yields, according to Zoopla. This report stated that the average gross rental yield is 6.01%, while our calculation has put it at 6.65%.

            If you’re looking for a high-yielding opportunity in the Cheltenham area, it could be worth looking for a good deal in Gloucester.

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              Why You Should Consider a Buy-to-Let Investment in Cheltenham

              Attractive Location and Lifestyle

              Known as the UK’s most complete regency town and ‘the Garden Town of England’, the town itself is also easy on the eyes. Cleeve Hill is the highest point in the Cotswolds and can provide impressive views of the surrounding countryside. You can even see as far as Wales on a clear day. There are sites of historical importance adding to the area’s attractions, such as the Pittville Pump Room, a reminder of the town’s past status as a spa town. There is a useful guide detailing how to make money on property for anyone looking to learn more about property investing in 2024.

              Many Londoners are looking to move elsewhere, driven out by the high cost of living in the capital, and other areas in the South of England are on their radar. While Cheltenham prices are expensive compared to other UK regions, they are more affordable and offer more space than London property. Cheltenham Spa station has direct trains to Bristol, Birmingham, and London, making it convenient for travel links to these areas. The team at RWinvest have created to answer questions such as, how much is stamp duty for property in the UK.

              After the COVID-19 pandemic, many renters have started valuing proximity to green spaces and are on the lookout for countryside towns. The lifestyle offered by residing in Cheltenham will keep demand high in the town despite the higher prices, attracting affluent residents.

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                Construction site

                Cheltenham New Builds

                The undersupply of available rental properties has led to high demand for new build developments. Cheltenham Borough Council and private developers have been working across Cheltenham on regeneration and Cheltenham new build schemes since 2006.

                So, do Cheltenham new builds offer a good opportunity for property investment? As Cheltenham is already an expensive area, new builds are particularly pricey in the town. As an upmarket area, it has attracted many luxury property developments.

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                  Buildings

                  Off-Plan Property in Cheltenham

                  As mentioned, new build properties are typically more expensive than older properties, so off-plan investment is growing in popularity as a way to get involved in new build investment at a discounted price.

                  Off-plan refers to investing in a property while it is still in the planning or construction stage. By investing earlier on in the project, investors can take advantage of more affordable prices and payment plans when buying buy-to-let property investment uk flats.

                  However, off-plan investment opportunities are often more concentrated in major cities such as London, Manchester, and Liverpool, so there may not be many chances to invest in off-plan in Cheltenham.

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                  How Does Cheltenham Compare to Other UK Regions When It Comes to Buy-to-Let?

                  Cheltenham is an attractive area to live in, but despite this high demand, the rental yields are too low to consider the town a buy-to-let hotspot.

                  However, if you’re looking specifically for a buy-to-let investment in this area, Gloucester is considered one of the best-yielding towns in the South West region. If you’re looking for an investment closer to London, it may be worth exploring property in Luton.

                  For investors willing to look further afield, the North of England is generally much more affordable than the South regarding property. For instance, the average property in Liverpool to buy comes in at £180,268, meaning that, in theory, you could buy two houses in Liverpool for the same price as one in Cheltenham.

                  The North is also more promising when it comes to capital growth forecasts. In Savills’ latest predictions, the South West looks set to grow 17.9%, but northern areas are forecasted to see growth upwards of 20%—for example, 20.2% in the North West.

                  Looking to the future, research has shown that North West property professionals are more optimistic about the market.

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                    Want to Invest in Cheltenham?

                    Cheltenham is well-placed in the Gloucestershire countryside, but other nearby areas have more to offer, and for investors looking at the UK as a whole, it doesn’t offer as good of a deal as other regions.

                    There will always be interest in prestigious areas such as Cheltenham, but the demand isn’t enough to outweigh the negative effect that expensive property prices and lower rental yields will have on returns. More lucrative opportunities can be found in northern cities with comparable demand.

                    Further Reading: To explore more UK buy-to-let areas, see some of our latest guides covering topics such as new builds Hastings, Burton Property Investment, and off-plan property in High Wycombe.

                    Map of Cheltenham

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                    Author

                    Jessica Ferris

                    Jessica is a property content writer at RWinvest. Keeping a close eye on the UK property market, Jessica helps our readers stay informed and up to date on the latest market news and statistics.

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