Buy-to-let investors can benefit from 12% price discounts for unmodernised homes

Research by London lettings and estate agent, Benham and Reeves, shows that buy-to-let investors can snap up unmodernised properties for as much as -12.3% below the average market house price, providing a stellar opportunity for strong and relatively fast investment returns.

Benham and Reeves analysed house price data for 36,175 unmodernised properties currently listed for sale on England’s housing market* and found that, on average, they are priced -7.4% below the wider market average.

While the average house price in England currently stands at £373,156, the average for an unmodernised property is -7.4% lower at £345,504 – a cash difference of -£27,651.

Within regional markets, the discounts available for modernised homes grow even bigger.

In the North West of England, the average house price currently sits at £245,065.while the average unmodernised home costs just £215,000, marking a saving of -12.3% or -£30,065.

In the North East an average price of £149,975 for an unmodernised home is -11.2% below the region’s wider average (£168,970), while the West Midlands and South East offer average discounts of -9.1% and -8.1% respectively.

In London, the average unmodernised discount of -7.4% is equivalent to -£59,000 due to the capital’s valuable property market, while Yorkshire & Humber (-5.9%), the South West (-5.8%), East Midlands (-5.7%), and East of England (-5.6%) all provide savings of more than 5%.

Where are the most unmodernised opportunities found?

In the South West region alone there are currently 5,982 unmodernised homes listed for sale, which is equivalent to 16.5% of the national total.

This is followed by the South East (15.6%), East of England (13.4%), North West (12.6%), West Midlands (10.7%), East Midlands (10.4%), Yorkshire & Humber (10.1%), London (9.1%), and the North East (1.6%).

Director of Benham and Reeves, Marc von Grundherr, commented:

“Unmodernised properties can be snapped up at a significant discount compared to the wider market which makes them a cost-effective investment for landlords who are looking for accessible ways to start or scale a portfolio.

The Decent Homes Standard is set to come back soon with tougher rules, which means lots of landlords will need to upgrade their properties if they are not already doing so. That makes now a great time to snap up older homes at lower prices before demand rises.”