BTL locations in London?

nollag2006

Was considering getting into the BTL market.

Budget is up to £250k (mortgage of £200k)

Any one got any suggestions of decent areas to buy, or any useful articles to read?

Was considering Vauxhall, or Bermondsey: both seem to offer decent rental yields.

Doozergirl

I doubt very much that you'd scrape even with a mortgage of £200k! Your rent needs to be something like 130% of the mortgage repayments to even qualify for the mortgage. Are you sure?

I think it's so volatile in London at the moment, I just wouldn't do it but I did buy to sell last year in Crystal Palace which has had a lot of hype surrounding the new tube line, though I've no doubt it was sheeer speculation that has sent prices rocketing. The figures would have stacked up for BTL against the price I paid but not against the price I sold at.

GHPC

You've arrived at the Buy To Let party just when the place is full of empty beer cans, the chillout CD's on and there's just a snogging couple in the corner.

If you don't know what the word "yield" means then find out quick. Good luck finding a house with a yield above 5%, never mind one that will actually cover your mortgage.

Can you afford to lose that £50k deposit?

nollag2006

Doozergirl - why did you choose to get out of Crystal Palace so early ?

I'm more interested in a 5 - 10 year time horizon.

Are rents holding up well in that area?

Doozergirl

I don't think the 5-10 year horizon looks that great and I'd much rather save my equity for BTL when houses are cheap, not at a historical high! The rate of increase made me nervous and generally I like to beat HPI rather than wait for it, though I can't really complain about making £30,000 more than I expected in the space of a few months.

In Crystal Palace the rents will be less than Vauxhall etc are cheaper but so are the houses. Rents anywhere won't get you the yield you need to pay off the mortgage, though London has far better yields than most places. So you're looking for places where prices are likely to increase above the rest. The risk that goes with these areas in London is that the prices, I think, are more volatile as a result and that's why I wanted to get in and out quickly. I prefer my risks calculated; I'm not a natural gambler!

If you get in near to the train station, a tenant is a dead cert, apparantly. I also went on the SE20 side which is a less desirable postcode but CP train station is right on the border of SE19 and SE20; which tenant really cares about a postcode?

As they say, you make money when you buy a property, not when you sell so the key is to biding your time for the right property, cheap.

I'm offering advice but I still wouldn't BTL!

nollag2006

Thanks DG !

I'd rather be in the market, and hedged, rather than be outside and praying for a fall.

I'll check out the areas of SE19 and SE20

Feanor

If you are looking for something for the long term...the area Elephant and castle may be of interest. At the moment it really isa complete dump, BUT a HUGE regeneration project has been confirmed, so may be worth doing a bit of research into that area.

nollag2006

Thanks Feanor !

phlash

nollag2006 wrote: »

Thanks Feanor !

Good luck to you.

I really wouldn't get into BTL now. It's interesting that you've mentioned about praying for a crash, I don't think you'd need to, most LL are praying to stop the inevitable crash.

Do your research about the BTL investment and whether it really ways up in the reward vs risk stakes.

The 5-10 year outlook has the worst outlook of all. You may still get gains in 1 year and in 15-20 years, but 5-10, I wouldn't touch with a barge pole.

Good luck whichever way you go.

lynzpower

Feanor wrote: »

If you are looking for something for the long term...the area Elephant and castle may be of interest. At the moment it really isa complete dump, BUT a HUGE regeneration project has been confirmed, so may be worth doing a bit of research into that area.

I think you would really struggle in E&C

1) the EA where I was working went dual agency with another EA in the area - they managed to get sold a one bed council flat with no garden for 280, the condition it was in was very poor needed everything doing, I mean everything. I personally think that E&C is overpriced. Given that a lot of people wont live there. I certainly would not, would you?

2) the regneration programme is in absolute tatters over there, we were actually told to stop mentioning the regeneration in E&C when selling property there was a chance we could get done for misselling as the plans and funding all over the shop.

Feanor

Sorry i didn;t mean to lead anyone up the garden path, i just suggested it might be worth some more research as there has been quite a bit of hype about the regeneration project. I work not too far from there, in Stockwell.