Considering Buy to Let in London?

What do you think?????????????????
I thought with the falling prices and weak sterling, now might be a good time to buy a 2 bed apartment in a good area?

Problems:
I don't know London.
I don't know if you need car parking also or what.
Where can I find out about transactions costs, taxes etc.
Alot of the properties are leasehold with short leases eg 52 yrs.
I would be happier with freehold but these seem thin on the ground.

research the finance first then look to see what you can afford. 25% deposit minimum required to get a buy to let mortgage at the moment in the UK. BM Solutions currently offering 5.49% fixed for 3 years. arrangement fee around £2,000 in think. good luck.
ps. if you happen to be a cash buyer then the auctions is the place to be.

If you don't know the area I wouldn't buy in any market. I think one needs to know the market to know whether a particular property represents value relative to others in the area irrespective of the macro economic situation

Be a bit careful with London. The Sterling story has to be taken into account and [broken link removed] (or at least they were up to November and there is nothing to suggest that they've been rising since). Unfortunately, rents are falling severely as well.

Hi,

I am based near London. With falling property prices and the collapse of sterling there are some brilliant bargains. If I can be of any help please come back to me at anytime.

Eddie

Hi,

I'm from Dublin but have lived in London for the past 15 years and recently relocated back. I was primarily based in North London and East London (Canary Wharf). I think there may be bargains but not yet. The market has some way to fall which is not good news for me as I still have properties there! If you do decide to buy you need to be very careful on the area to buy. I think London is a far better investment than Dublin for returns. have another look in 6 months.

d

mosstown said:

research the finance first, arrangement fee around £2,000 in think. good luck..

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Thanks Moss, 2k sounds extremely steep for an arrangement fee, which I have never heard of before??? Is that the norm in the UK?

mosstown said:

ps. if you happen to be a cash buyer then the auctions is the place to be.

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Why would you have to be a cash buyer for the auctions?
Where would one find out what's available in the auctions...I have googled it and got no hits in the preliminary areas I'm interested in and its seems there are 200 odd auction houses. So any myhome.ie type place that catches them all?

Alan Robert said:

If you don't know the area I wouldn't buy in any market. I think one needs to know the market to know whether a particular property represents value relative to others in the area irrespective of the macro economic situation

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True there is greater risk, but its is an easier to research market than many mentioned on these boards and certainly investing in Ireland or France, the only other markets I know is a no no.

OverseasCafe said:

Be a bit careful with London. The Sterling story has to be taken into account and property prices are falling (or at least they were up to November and there is nothing to suggest that they've been rising since). Unfortunately, rents are falling severely as well.

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The sterling story is a large reason I'm interested. Obviously currency risk is an added issue, but if you are flexible with your exit strategy you can time it appropriately...hopefully
If property prices and rents are falling then yields are holding. Few people are lucky enough to buy at the very bottom of the market, but if one consider BTL a long term investment it generally works, in a relatively stable macroeconomic climate like the UK.

macktheknife said:

Hi,

I am based near London. With falling property prices and the collapse of sterling there are some brilliant bargains. If I can be of any help please come back to me at anytime.

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Thanks Eddie.

denise2007 said:

Hi,

I'm from Dublin but have lived in London for the past 15 years and recently relocated back. I was primarily based in North London and East London (Canary Wharf). I think there may be bargains but not yet. The market has some way to fall which is not good news for me as I still have properties there! If you do decide to buy you need to be very careful on the area to buy. I think London is a far better investment than Dublin for returns. have another look in 6 months.
d

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Thanks Denise, where in north london would you think is a good area?
It'll probably take me 6 months to get it together anyway.

Mommah said:

If one consider BTL a long term investment it generally works, in a relatively stable macroeconomic climate like the UK.

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The UK property market isn't in fact that stable, it is very prone to booms and crashes. This obviously offers more buy-in points than other areas, but you have to be prepared for the fact that it will probably be a bit of a roller coaster ride. There is also a huge oversupply of rental property there at the moment which is why you have to be very careful about where you buy. I'd be having a good long chat with a few letting agents in the areas you are considering before you make any moves.

OverseasCafe said:

I'd be having a good long chat with a few letting agents in the areas you are considering before you make any moves.

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Great suggestion OSC Thanks!

When I say stable I mean in relative to many other countries which have been fashionable in the last few years.

list of auction websites

savills.co.uk
strettons.co.uk
allsop.co.uk
pugh-company.co.uk
mchughandco.com
drivers.co.uk (drivers and norris)
www.a-r.co.uk (andrews and robinson, SE5)
athawesauctioneers.co.uk
propwld.co.uk/auction (bagshaws)
barnardmarcusauctions.co.uk
wabarnes.co.uk
barnettross.co.uk
besleyhillsurveyit.co.uk
bigwood.uk.com
bondwolfe.net
boultonsestateagents.co.uk
bradleys-estate-agents.co.uk
breachwoodingram.co.uk
rightmove.co.uk/cpa
darlows.co.uk/auctions
dedman.net
auctions.erinaceous.com
cmx.joneslanglasalle.com
mainandmain.co.uk
northwestpropertyauctions.com
sva-auctions.co.uk (scotland)
wardandpartners.co.uk/auction
willmotts.uk.com
wilsonsauctions.com (belfast)

you will need at least 10% to put down on the day when the hammer falls and i suggest you have viewed properties beforehand, arranged finance and be able to complete in 28 days. if you dont complete on the agreed date, you lose your 10% plus costs.
as i said before you need a 25% deposit minimum at the moment to secure a BTL mortgage. ie. property for £160,000 then you need a £40,000 deposit plus legal costs and the rest. a fair amount of cash to have available just for the deposit alone.
and if you research the UK BTL mortgage market, you will discover all these facts like charges of £2,000 or 2.5% arrangement fee.
by the way, this list of auctions is something i copied off this site for you. dont know how to do a link but the point is this was already here if you had searched ! - search UK property auctions on this site.

Alan Robert said:

If you don't know the area I wouldn't buy in any market. I think one needs to know the market to know whether a particular property represents value relative to others in the area irrespective of the macro economic situation

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Property should be valued against the historical yield not against other properties in the area.

London yields are still too low and hence prices will fall further. A good 20%-40% further to fall to bottom out.

http://www.globalresearch.ca/index.php?context=va&aid=11640

OverseasCafe said:

The UK property market isn't in fact that stable, it is very prone to booms and crashes. This obviously offers more buy-in points than other areas, but you have to be prepared for the fact that it will probably be a bit of a roller coaster ride. There is also a huge oversupply of rental property there at the moment which is why you have to be very careful about where you buy. I'd be having a good long chat with a few letting agents in the areas you are considering before you make any moves.

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This is very true. A lot of people are having difficulty selling in the UK and therefore putting properties on the letting market. The rental market is pretty much flooded in every area which is causing rentals to decrease. BTL is definitely a long term investment, don't even consider doing this if you're looking for short to medium term term gains.

Thanks folks.
One thing that puzzles me some is the rental market being flooded by failed-to-sell properties (FTS). This assumes that failed-to-sell occupiers have moved on...how does this happen if they FTS? Usually like us they moved on and rent...therefore cancelling out the +1 rental property by taking another rental property off the market.

The only way I can figure that the FTS properties are increasing the housing stock is if the previous occupants were all immigrants who have vamoosed home. A possibility but it seems a very large effect.

they convert their current residential mortgage on their main home to a let to buy, take some of the equity out assuming they have some and buy a new house ! that's it, no mystery. i have a couple of friends who have very small mortgages left on their properties who now want to move to a better area or bigger house or nearer a particular secondary school to be in the catchment area and they are in the process of doing that at the moment without any trouble.