is there any point in buying property in rubish areas?

economic

Just want to start a new debate.

does it make financial sense to buy a property in a rubbish working class or poor area in london? given prices have risen so fast lot of these areas have outperformed as they started from a relatively very low level. does it now make sense to buy in these areas as an investment?

i feel no as barring any kind of massive regenration programme, poor working class areas will remain poor and so over the long term will underperform. its always better to buy in a safe area in demand.

what do you think?

Out,_Vile_Jelly

I think the core housing stock is key. If it is solid, spacious and not being built anymore (think of those lovely Notting Hill regency terraces) it can always be gentrified.

Marktheshark

My brother bought a run down flat in Kentish about 25 years ago.
Next month his £35,000 investment will be his £670,000 pension pot and he has had 25 years rent at todays prices of £1100 a month

economic

Marktheshark wrote: »

My brother bought a run down flat in Kentish about 25 years ago.
Next month his £35,000 investment will be his £670,000 pension pot and he has had 25 years rent at todays prices of £1100 a month

past does not indicate the future.

lisyloo

does it now make sense to buy in these areas as an investment?

Not really IMO.
Everywhere in London is priced already to within an inch of it's life and that includes future prospects e.g. crossrail, new tube at nine elms.
So I'd say it's largely priced in.

always_sunny

economic wrote: »

does it now make sense to buy in these areas as an investment?

It depends a great deal what you consider an investment; yield in London are fairly low for new entry to the market. Capital appreciation can only go up so much.

Unless strictly required, anyone looking at London is simply mad!

westernpromise

The troubles with rubish areas is that they tend to be full of rubes.

kabayiri

There was a bit of a trend in recent times to buy ex-boarding houses in Blackpool, a town which has seen better days.

An ex-colleague bought a place for £70K (I think) which was quite a lot of space for little money.

People fill them with unemployed or low paid who need HB.

That sounds a decent return to me.

I think there's still a plan to relocate asylum seekers and migrants needing housing from under pressure places like Hounslow up to Liverpool and the like.

There must be money there. It's not like these people can demand superior accommodation is it?

Conrad

always_sunny wrote: »

. Capital appreciation can only go up so much.

Unless strictly required, anyone looking at London is simply mad!

Heard this sentiment for all my adult life and its always turned out wrong

Prices will be multiples higher in another 25 years. Before you hot me with affordability and salary multiples 'evidence', again heard all this over and again, always these clumsy projections end up meaningless.


My own strategy is buying just on the M25 periphery in areas with good transport links. Finding a lot of people moving out of London to find better value but of course this acts as demand push factor on prices.

westernpromise

In the 1950s you could buy a whole house in white stucco Maida Vale for £2k.
By the early 60s it was worth £10k and London had gorn mad.
By the early 70s it was worth £50k and London had gorn mad.
By the early 80s it was worth £300k and London had gorn mad.
By the early 90s it was worth £1.5 million and London had gorn mad.
By the early 00s it was worth £4 million and London had gorn mad.
Today it's worth £12 million and London clearly can't go any higher.

kabayiri

economic wrote: »

...
i feel no as barring any kind of massive regenration programme, poor working class areas will remain poor and so over the long term will underperform. its always better to buy in a safe area in demand.

what do you think?

It is said that the ex Liverpool manager, Brendan Rogers, bought a whole stack of terraces very cheap around Anfield.

He wasn't banking on a load of gentrified folk moving in, but on ambitious expansion plans by the football club.

There's more angles than you describe.