Prime New Build Property as an Investment?

Radge70

I have a small portfolio of properties (8 of them) that I have been renting out for the past 15 years.  They were all purchased at the height of the property boom and shortly before the crash in 2008.  Whilst there has been (literally) no capital growth on them, the rental income has been very good over the years.

We are probably at the height of the latest property boom again and I am thinking of doing things differently with my latest investment plan, but it’s an area I have no experience in so I’m just at the research stage.

I am considering purchasing a new build in a prime location (St James Quarter in the centre of Edinburgh) with the aim of achieving quick capital growth at the expense of high rental profit.  So basically, the opposite of how my 2007 investments worked out.

I’m just looking for people’s views on this in terms of the risks.  Even by Edinburgh’s standards this development is extremely pricey but my understanding is that the prime market is a different kettle of fish and that short and long-term capital growth projections are still high, despite the recent signs thar things are calming down a bit with the housing market in general.  I am also aware that there is a general trend for new builds to initially decrease in value but I think this is also dependant on location.

With this particular development being so unique (it’s a new £1b “mixed-use” development with the apartments located on top of a new shopping centre with a fancy hotel in the middle), it’s very difficult to draw comparisons within the same city but it may be that others have had similar experiences elsewhere in the UK?  One of the main attractions of the residential properties is the spectacular views across Edinburgh that they boast (albeit not for any of the properties I can afford but the shared roof top gardens do still offer these views)