Stratford still a good buy for long term

toothwiz

I was wondering what anyones thoughts are on the long term capital growth
in stratford east london. I have just put down an offer on a 2 bed house in stratford village for 235k BTL property. Its a 15min walk from the station. Prices have really risen and I am hoping to keep it 10 years. i will have to supplement the mortgage as rent doesnt cover it but am hoping it will rise in value. Are there too many developments to compete with and how do you see the market going?

lynzpower

I live round these parts, and from a personal perspective, and looking at rents in the area, personally, I think its overpriced. I like the area, but its still a bit scruffy, pound shops galore etc, still quite a bit of street crime. The only entertainment in Stratford itself is wetherspoons/ yateses style. What figure are you expecting to ask for it? I ask this as lots of people I know are getting v cheap rents in better areas and competition due to voids seems to be on the up, this is anecdotal of course.
EDIT TO SAY, have you even been there... stratford village!?! Id never call it that, estate agents language that is!

Sorry, just re-read this back and OH reckons its a bit harsh what I put. It depends of course who you want to let to. There are big university campuses there, that much is true. Yes there are brill transport links with its 3 stops to L st.

Also to mention, check out Bow, where I am. Its Zone 2, and there are hundreds of flats all being chucked up all over the place. Many many of them are empty, and with to let signs in the window and have been for some weeks.

nmiah786

toothwiz wrote:

I was wondering what anyones thoughts are on the long term capital growth
in stratford east london. I have just put down an offer on a 2 bed house in stratford village for 235k BTL property. Its a 15min walk from the station. Prices have really risen and I am hoping to keep it 10 years. i will have to supplement the mortgage as rent doesnt cover it but am hoping it will rise in value. Are there too many developments to compete with and how do you see the market going?

I personally think that price is too high for a 2 bed house. Last year I was was seeing 2 bed houses in Stratford for £215k max......thats a crazy price rise in this climate!

Are you sure you want to purchase this and supplement the mortgage from your pocket just in the hope that the prices will rise!!!!

I personally would not!!!

Good luck by the way.

toothwiz

I expect to get rent of £800/mth and yes I know the area is scruffy but am hoping with the regeneration it may smarten up or am I living in cuckoo land? Prices are definately high, 3 years ago they were 185k. Am kicking myself about not buying then. Am hoping that in 10 years it will be worth at least 300k ! Incidentally Do you know anything about plans for their awful town centre?

lynzpower

Newham council where stratford is is tremendously deprived, I will say that much. I have worked with employees of the council for some years ( social work) and they are struggling, quite frankly, I think there are a lot of people on benefits and not ennough income in the council. In fact, stratford town centre has had a refurb in the last few years ( tube station, bus station & around the indoor shopping centre) I personally would be very surprised if they would spend more on that with other competing priorities. You might want to look at their development plans, should be online.

The other thing I always think is you'd expect "city/ wharf workers" to snap up stratford flats, but they ( my mates etc, anyone I know ) wouldnt dream of it and choose to live in very inconvenient battersea/wandsworth/ clapham/putney for the coffee shops and all that jazz.

nmiah786

Just out of interest there was a BP petrol station very close to Stratford and the day the Olympics got announced......guess what that petrol station was closed straight away and cleared up. I think they are just waiting for planning permission to come through for building flats on that ground!!!

Also, you are going to be putting in over £100 per month from you own pocket just to cover the interest only mortgage!!! ARE YOU SURE YOU WANT TO DO THIS!!!

lynzpower

Incidentally, if Nmiahs conservative estimates of supplementing to the tune of 100pcm ( not including voids or repairs for example) over 10 years you will have paid in supplements £120,000 ( bare minimum)

nmiah786

lynzpower wrote:

Incidentally, if Nmiahs conservative estimates of supplementing to the tune of 100pcm ( not including voids or repairs for example) over 10 years you will have paid in supplements £120,000 ( bare minimum)

I actually calculated closer to £200 extra per month but decided to say OVER £100 just to be on the safe side and avoid any comeback!!!!

Conservative it definately was!!!

Rave

How refreshing to see every respondent sounding a note of caution. Here's mine: you would have to be mad to do it. My dad just bought a flat in an 'executive' new development near Gallion's Reach. I could rent a flat in his block for less than the interest on his mortgage. As far as I can tell the building is still fairly empty 8 months after he moved in.

He actually lives there, and isn't in it for a quick profit. He also managed to get in to the Florida market before the mania really took hold and is still sitting on a tidy profit on a place there. You on the other hand are proposing to buy a property at the top of probably the biggest bubble market in property in UK history, and then subsidise your tenants in the hope of future capital gains.

The Olympics are not going to regenrate the entirety of East London, it's one specific area. So, where are the capital gains going to come from? Will buyers really pay top dollar for a house just because they'll be living next door to a three week long sporting event several years in the future?

Would you?

lynzpower

http://www.rightmove.co.uk/action/publicsite.PropertySearch

PLenty of property to rent well under the 800pcm mark.

lynzpower

nmiah786 wrote:

I actually calculated closer to £200 extra per month but decided to say OVER £100 just to be on the safe side and avoid any comeback!!!!

Conservative it definately was!!!

So, roughly looking at subsidising the property to the tune of 240k over its 10 year span, and the property is 235k :wall: