Top Places To Make Money in London

Yes, as the title suggests Southwark is a top target for shrewd investors who are leaving over-saturated markets for pastures new. Southwark is home to universally recognised and iconic landmarks such as the Globe and the Shard and this property finds itself tucked away within this catchment area. 

To find a two double bedroom property that oozes class in the form of a new heating system and radiators, touch-screen thermostats that control the under floor heating in the bathroom as well as the kitchen and it has been completely rewired throughout too; with wooden floors, (that’s oak flooring not just the tacky beech effect some people gravitate towards like a bull does to a matador)! The lease has a whopping 115 years left, service charge is a puny £750, with just a symbolic £10 annual ground rent. Does one need more convincing? 

Regeneration has already started here, with a gorgeous modern building (along with all the prestigious cars that grace it’s entrance) positioned adjacent to Aylesbury House, but of course it has; with the anticipated growth it is surely primed to capitalise on in the medium to long term. This property should rent in the region of £330-350 per week that gives a potential investor nearly 6% yield if bought for the full asking price.

On top of all this, it belongs to a borough that is recognised as the place to be right now largely due to the 21.5% growth that the area is expecting to witness as reported in the Telegraph in February 20015. We do not anticipate for this property to stay on the market for particularly long as the last one we marketed nearby sold in 2 weeks.

Brook W

Sales Negotiator

XanderMatthew

Deal of the week, and it's only Monday!

Buy-to-let investors looking for a great yield should look no further than this great 3 bedroom purpose built flat in Streatham Hill. With an expected rental income of £425 per week equalling £22,100 per year, even at the asking price of £275,000 this gives any prospective buyer a yield of just over 8%. With long term fixed rate mortgages of up to 10 years with rates around 2% becoming available on the market this would look like a very sensible purchase.

http://www.rightmove.co.uk/property-for-sale/property-48571028.html

With the Streatham Hill property market currently booming and benefitting from buyers looking further afield to find somewhere affordable, any potential investor would also be buying into a market which is likely to provide them with an excellent level of capital appreciation in the medium term, on top of an attractive yield. The property itself, with a total internal area of 836 sq ft, is the size of a small house. Over two levels with a large eat-in kitchen, spacious separate reception downstairs leading to a private balcony, three bedrooms upstairs along with the bathroom and a second WC. The location is excellent too, being just a short walk Tulse Hill station, as well as all of the shops and amenities of Tulse Hill – this represents fantastic value for money.

If you have any questions about a buy-to-let purchase you’ve got your eye on by all means drop me a line on email or call the office on 020 3397 2099; I’d be happy to help.

Richard Thompson

Sales Manager

XanderMatthew

Capital Appreciation vs Rental Yield

It’s an age-old debate: do I buy something “nice” and hope for long-term capital appreciation, or do I buy something a bit less easy on the eye and get a brilliant rental yield?

Take this property as an example:

http://www.rightmove.co.uk/property-for-sale/property-50514578.html

At first glance it appears to be a spacious three bedroom property with private garden.  On a second look we realise it’s a usually avoided high-rise tower block.  But wait, we have 3 double bedrooms in zone 2 with excellent transport links to the City, and just a stone’s throw from Battersea Park.

So what makes this such a wise investment?  Surely investing in a Victorian property is a more attractive proposition?  Let’s look at this in more depth, comparing with a 3 bedroom Victorian mansion block flat on Prince of Wales drive, just around the corner. 

Bought for £470,000 in 2001 and sold for £790,000 in 2010 the Victorian flat has seen price growth of 5.7% a year.  Average rents at the time of purchase would give a yield of 5% a year.  How does that compare with our ex-local flat?  Bought in 2001 for £82,500 and sold in 2011 for £144,000 it’s seen 5.7% a year price growth as well.  And the rental yield?  At the time of purchase you’d be enjoying a 15% return on your investment.

With identical price growth and a far superior rental yield, it’s easy to see why investing in ex-local authority properties is the thing to do.  Once you factor in the running costs associated with period properties (endless repairs, high service charges – for mansion blocks that is - , costly lease extensions etc.) investing in ex-local authority flats becomes an even more attractive proposition.

For ultimate peace of mind and a truly hassle-free investment I’d suggest asking your lettings agent to look after your property for you.  Naturally XanderMatthew offers a full management service.  To find out what we can do to make your life easier, just give us a call on 020 3397 2099.

If you have any investments you’d like to run by me to see what they’d yield long term, do get in touch.

All-time low rates, so repay, right? No, borrow more!

A client asked me for my advice on a buy-to-let investment not so long ago. He said he had £200,000 saved up for an investment property and wanted my advice on what to buy. He was looking to get a small mortgage of £50,000 and hence get a good difference between the monthly rent and the interest payments on the loan. Very sensible.

We had worked out that over the years his property would go up in value and stand the test of time, and also give him a kitty for when things went wrong. Plenty of money in that kitty; from experience more than is strictly necessary. I posed the question “what if I could show you how to buy two properties with the same money and you can DOUBLE your gains?” He was interested.

You see here is “le grand truc…” By taking the remaining £150,000 in our example and investing it in further properties you could quadruple your capital gains over time. You wouldn’t quadruple your cash flow as your interest payments would gobble some of that up, but nonetheless the crude example below illustrates my point: by investing borrowed money into further property you will be better off than choosing to borrow less money - you will increase your capital gains over time.

Example: (based on tax rate of 40% earnings between £31,866 and £150,000)

Purchase Price	£    250,000	£    250,000
Annual Rental Income:	£      15,600	£      15,600
Deposit	£    200,000	£      50,000
Loan	£      50,000	£    200,000
Interest Rate	2.50%	2.50%
Annual Interest	£        1,250	£        5,000
Yield before other costs	£      14,350	£      10,600
Net after tax:	£        8,610	£        6,360

If we estimate an average price rise of 8% on a property value of £250,000 it would be worth £539,731.25 in 10 years’ time. If you had one property you would gain £289,731.25 (excluding costs of course). Imagine if you had 3 or 4…

If you have any questions or would like to get in touch to talk property, drop me a line on email or call 020 3397 2099.

Hot Property in Cold Weather

What has the lettings market of 2015 told us thus far?

We have found in the past that January was an extremely busy month. Up until 2013 we would say it was the busiest month of the first two quarters. This was driven by relationships made and broken over Christmas and New Year’s resolutions to find a new home. We found that one and two bedroom properties were most popular in the early part of the year leading up to Spring.

2014 and 2015 have been different. A different trend is emerging.

This year and last we have noticed that there is a much higher demand for three and four bedroom homes. These offer a lower rent per person and are being snapped up quicker than they would have been a couple of years ago. I feel the main contributing factor is that tenants are now looking for bargains to minimise their spend on rent every month. This has also led to more and more tenants pairing up through on room share sites and through flat-mating events (equivalent of speed dating for a flat mate, could lead to romance - who knows?). in summary the cheaper one and two bedroom flats will still let relatively quickly but any landlords looking to achieve a large rent increase will have to be a little more realistic or may end up being left disappointed with an unexpected void period!

And so we conclude… 2015 so far has left us hunting for bigger properties!