Good times to be a London landlord

westernpromise

http://www.theguardian.com/world/2016/may/25/dramatic-population-increases-forecast-for-london-as-northern-towns-lose-workers#comment-74973092

Aberdeen not so much.

cells

Pretty much the same as the last 20 years while the poor northerners coal mines and steel works were closed, London powered ahead driven by the expanding global industries of advertising, film, music, legal, accountancy, software, tech, education, asset management, banking and insurance.

westernpromise

cells wrote: »

Pretty much the same as the last 20 years while the poor northerners coal mines and steel works were closed, London powered ahead driven by the expanding global industries of advertising, film, music, legal, accountancy, software, tech, education, asset management, banking and insurance.

And commodities, and architecture, and management consulting, and securities, and law, and PR, etc etc etc.....

Glover1862

Fairly surprised by Corby increasing so much, was looking to buy there but purchased in Kettering, still not too far. Can still get a decent 3 beds semi for £130k, don't think they'll go down much more, pretty much further up north prices already.

lisyloo

I'm not sure I agree about the over 65s. Sure workers will come, but wouldn't it be logical for people to leave when they retire, not just for somewhere less crowded but in the cases of homeowners to free up equity.

padington

lisyloo wrote: »

I'm not sure I agree about the over 65s. Sure workers will come, but wouldn't it be logical for people to leave when they retire, not just for somewhere less crowded but in the cases of homeowners to free up equity.

No, rich older people want to be as close to the London action as possible. They want to be in walking distance of theatres,
Cinema's, museums, galleries and close to the best shops.

The dream of ending it all in the countryside is over.

westernpromise

Of course, the inevitable impact of all this on housing demand and hence price will not be attributed by the usual suspects to 4 million more people turning up. It will of course be blamed on landlords.

Good time to be long; in fact if this is true it could still be worth getting in.

economic

westernpromise wrote: »

Of course, the inevitable impact of all this on housing demand and hence price will not be attributed by the usual suspects to 4 million more people turning up. It will of course be blamed on landlords.

Good time to be long; in fact if this is true it could still be worth getting in.

im thinking of buying another actually in london zone 2/3.

westernpromise

I had always thought that when I had a clear net million as realisable equity post-sale and post-CGT, that would be when I'd exit, putting the million to work elsewhere.

My view on this has shifted gradually in the very recent past though (by very recent I mean within the last five years).

- All the longer term demographic indicators, like this 4 million people story, are that this still has some way to run.
- From a competition perspective, there is no serious rival to London anywhere in sight. Paris? Taxes and terrorists. Germany? Mad language, bad food, Syrians. Etc.
- Letting margins are enormous. My mortgage costs £300 a month and the property lets for £2,500 a momnth.
- Interest rates are ultra low and in my judgement are going to remain ultra low for a very long time. 25 years would not surprise me; I cannot see any inflationary shock coming from any direction. I've come to the view that we're not even half way through the minimal interest rate age.

Taken together, you have a picture of low holding cost, low downside price risk and - if you own without a mortgage - low to manageable regulatory risk. Cashflow is so positive there seems no obvious cue to sell.

Increasingly I am thinking the Chinese way: never sell.

economic

westernpromise wrote: »

I had always thought that when I had a clear net million as realisable equity post-sale and post-CGT, that would be when I'd exit, putting the million to work elsewhere.

My view on this has shifted gradually in the very recent past though (by very recent I mean within the last five years).

- All the longer term demographic indicators, like this 4 million people story, are that this still has some way to run.
- From a competition perspective, there is no serious rival to London anywhere in sight. Paris? Taxes and terrorists. Germany? Mad language, bad food, Syrians. Etc.
- Letting margins are enormous. My mortgage costs £300 a month and the property lets for £2,500 a momnth.
- Interest rates are ultra low and in my judgement are going to remain ultra low for a very long time. 25 years would not surprise me; I cannot see any inflationary shock coming from any direction. I've come to the view that we're not even half way through the minimal interest rate age.

Taken together, you have a picture of low holding cost, low downside price risk and - if you own without a mortgage - low to manageable regulatory risk. Cashflow is so positive there seems no obvious cue to sell.

Increasingly I am thinking the Chinese way: never sell.

agree with most your points. i personally would only buy if i get something relatively cheap say a refurb or to add value through extenstion/loft conversion or during a market slowdown such as now. the problem is there is still very low supply of decent properties in good loctions within zone 2/3 london. very hard to find and very time consuming.

chucknorris

westernpromise wrote: »

Taken together, you have a picture of low holding cost, low downside price risk and - if you own without a mortgage - low to manageable regulatory risk. Cashflow is so positive there seems no obvious cue to sell.

Increasingly I am thinking the Chinese way: never sell.

Do you have family to leave the properties to? We don't, so selling to try and spend the equity is a major part of our retirement plan. But I am thinking that maybe rather than sell all my property soon, and investing the equity in shares, then as I get older moving from shares to bonds, maybe it would be better to hang onto some of the properties and go straight to bonds with that equity.