Property Investments outside of London. Is it worth it? - The Law House Family Law Solicitors, London & Peterborough


Property Investments outside of London. Is it worth it?

By in Property Law Category on January 31st, 2018

Shakeel

Are you thinking of buying a second or additional properties for investment purposes or adding to your existing portfolio? If you are a Londoner you might think that London with its ever increasing property prices and high rents is the place to invest.

You could be wrong! London has of course traditionally been a good place to purchase investment properties but as prices reach their peak and in some cases stagnate, looking “north of Watford” may not be a bad idea.

The dreaded Stamp Duty Land Tax Rules

Current Stamp Duty Land Tax (or stamp duty to you and I) rules can make purchasing your “buy to let” properties very expensive. Effectively, if you are home owner,  you are paying 3% tax on top of the normal SDLT rates for such a property. This can in some cases be a very large addition to the money you have to budget for when buying a property.

Where to purchse?

If you are looking to buy, where might be good areas to purchase? Why not try upcoming areas such as Birmingham where property prices are still reasonable. It is also within easy reach of London. Even if you are living in London you can still get to such places easily if you want to manage your portfolio yourself. Property prices are much cheaper than in London and therefore the higher rates of SDLT will also be more affordable.

If you purchase properties in University cities, finding students can be a lot easier. It can be a lucrative source of income for landlords but it not without its problems. Some cities such as Cambridge, for example, would have a student population as well as a working population. Prices are rising but it is likely you may see returns on your investment.

Cities such as Manchester, Liverpool, Leeds are good cities to look at. But don’t disregard  solid working towns such as Luton and Slough. They have high rates of employment and so have a large working population that requires accommodation to rent.

Things to consider when buying investment properties

You should, when buying your investment property, consider various matters. This includes:

  • past and current trends with regards to property prices;
  • employments trends in the area;
  • ease of commuting and rental values.

There are all sorts of reasons as to why someone may decide to invest in properties. The main reason is probably that you want to make an income from it. Of course, as with every investment, property prices can go up or down, so profit is not always guarnteed.

Who manages the properties?

Also think about how you would manage your portfolio if you have properties scattered throughout the UK. Management of such properties may not be an easy thing to do.  Will you look after them yourself? This might not always be practical. Managing a property remotely can be burdensome. It may be more practical to have an agency do the job for you, but this will come at a cost.

No investment is fail-safe, so just think carefully about where to buy a property before you do so.

If you require a solicitor to deal with your purchase or sale transaction or even a lease extension, why not give Shakeel Mir a call on 0203 150 1919?