Buying in London vs Midlands - Offsetting Rent

sunnysoho

Hello! Apologies if this has already been tackled on this amazing forum, and please point me in the right direction if there's already an existing similar thread.

I have roughly under £100k to use as a deposit on a property.

I'm from the Midlands (Telford) and still have friends and all my family there.

However, i've been living and working in London for the last 3 years and can't see myself moving back 'home' soon.

The question is; is it worth looking to buy in London (or the surrounding area) as this is where i live and work, or using that money to buy in the Midlands, pay off the mortgage quicker and then rent that property to offset my rent in London?

I hope that makes sense!

Any help, tips and advice would be greatly appreciated

SunnySoho

alfred64

If you are remaining in London indefinitely, sell your Telford property and look to buy in London.
Even the poorest London property will prove to be a better investment than the depressed Midlands.

Doozergirl

alfred64 wrote: »

If you are remaining in London indefinitely, sell your Telford property and look to buy in London.
Even the poorest London property will prove to be a better investment than the depressed Midlands.

The Midlands has the fastest house price growth at the moment and it doesn’t feel very depressed where I am at all, but thanks for the vote of confidence.

OP, if you can buy where you live, do that. I can’t see any reason to buy in the Midlands anyway. You need a home, not to be a landlord and a tenant. Way too complicated and you’re into paying tax on property income when you don’t even own your own home. Stick to what is easy.

JoJo1978

Buy in London if you can, but think outside the box in terms of area. We bought in an unfashionable SE postcode 10 years ago and managed to pay the mortgage off (pre crisis, got a bit lucky with the rates.) Sold in December...to move to a place double the size, in the Midlands after giving up our London careers.

Btw we sold to an overseas investor who will rent it out for the next few years. There'll always be some kind of buyer in London whatever the domestic housing market is doing. Not necessarily the case in smaller UK towns.

pink_pirlie

As an thankfully ex accidental landlord I would suggest buying a home to live in.
As one example ...
I had to put a new boiler in my house and psychologically I felt annoyed at the fact I was living in a rental house with a rubbish boiler and a property that was not well maintained and i was spending nearly £2000 on a boiler for someone else to enjoy whilst I was scrimping and saving to find the money to pay for it.

Cakeguts

And have a think about this. If you buy in the Midlands you could buy a much cheaper property and have a very small mortgage which means that you can afford to earn less in order to pay it off.

alfred64

She's already got one in the Midlands. In Telford, which is the pits, actually. The advice is to sell up and buy in the smoke.

Cakeguts

alfred64 wrote: »

She's already got one in the Midlands. In Telford, which is the pits, actually. The advice is to sell up and buy in the smoke.

Where does it say that?

Cakeguts

Penitent wrote: »

I was thinking the same thing. Prices are shooting up here and it's not exactly the nicest part of the Midlands.

I also agree about buying where you live. Being a landlord is a hassle and being a landlord from a distance is an even bigger hassle. What happens if the tenant doesn't pay their rent and trashes the place? You then have to pay your London rent and your BTL mortgage while you're repairing the damage/finding new tenants.

The only reason I suggested buying in the Midlands was that £100k towards a house could if you were careful be quite a big proportion of the cost of a property and to go back home and live in it would mean not having to earn as much as you need in London to buy something. I could be a much better quality of life than the cost of buying in London.

alfred64

If there are no ties in Telford then there is no point in investing there.
The area is declining, in recession and has been for years.
London is the way to go.

sunnysoho

Hi all,

Thanks so much for your replies

I don't own a property in Telford at the moment, just grew up there (lucky me!).

I potentially have just under £100k to invest in a mortgage/property.

My thinking was:
- Buy £100/120k property in Midlands/Telford
- Pay off mortgage quickly
- Use rent to chip away at London rent
- Potentially re-mortgage to get another property in the area (not for a long while though!)

Or:
- Use money for deposit on much smaller property in London/SE
- Crack on with my life
- Similar to JoJo1978, i can always sell up and buy elsewhere if i decide to move back

Sounds like juggling being a landlord and tenant could be a nightmare.

You're all leaning to the latter - buy a house to live in.