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    • sunnysoho
    • By sunnysoho 7th Feb 18, 5:30 PM
    • 3Posts
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    sunnysoho
    Buying in London vs Midlands - Offsetting Rent
    • #1
    • 7th Feb 18, 5:30 PM
    Buying in London vs Midlands - Offsetting Rent 7th Feb 18 at 5:30 PM
    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
Page 1
    • alfred64
    • By alfred64 7th Feb 18, 5:41 PM
    • 4,008 Posts
    • 4,425 Thanks
    alfred64
    • #2
    • 7th Feb 18, 5:41 PM
    • #2
    • 7th Feb 18, 5:41 PM
    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
    • By Doozergirl 7th Feb 18, 6:07 PM
    • 25,202 Posts
    • 68,808 Thanks
    Doozergirl
    • #3
    • 7th Feb 18, 6:07 PM
    • #3
    • 7th Feb 18, 6:07 PM
    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.
    Originally posted by alfred64
    The Midlands has the fastest house price growth at the moment and it doesnít 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 canít 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 youíre into paying tax on property income when you donít even own your own home. Stick to what is easy.
    Everything that is supposed to be in heaven is already here on earth.
    • JoJo1978
    • By JoJo1978 7th Feb 18, 6:27 PM
    • 356 Posts
    • 433 Thanks
    JoJo1978
    • #4
    • 7th Feb 18, 6:27 PM
    • #4
    • 7th Feb 18, 6:27 PM
    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.
    Hamster in the wheel (London) 1999-2017
    Mortgage free since 2015; Pension pot sorted 2017
    Part-time gigger and charity volunteer 2018
    • pink_pirlie
    • By pink_pirlie 7th Feb 18, 6:30 PM
    • 180 Posts
    • 113 Thanks
    pink_pirlie
    • #5
    • 7th Feb 18, 6:30 PM
    • #5
    • 7th Feb 18, 6:30 PM
    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
    • By Cakeguts 7th Feb 18, 7:30 PM
    • 4,424 Posts
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    Cakeguts
    • #6
    • 7th Feb 18, 7:30 PM
    • #6
    • 7th Feb 18, 7:30 PM
    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
    • By alfred64 7th Feb 18, 7:38 PM
    • 4,008 Posts
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    alfred64
    • #7
    • 7th Feb 18, 7:38 PM
    • #7
    • 7th Feb 18, 7:38 PM
    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
    • By Cakeguts 7th Feb 18, 8:35 PM
    • 4,424 Posts
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    Cakeguts
    • #8
    • 7th Feb 18, 8:35 PM
    • #8
    • 7th Feb 18, 8:35 PM
    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.
    Originally posted by alfred64
    Where does it say that?
    • Cakeguts
    • By Cakeguts 7th Feb 18, 8:39 PM
    • 4,424 Posts
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    Cakeguts
    • #9
    • 7th Feb 18, 8:39 PM
    • #9
    • 7th Feb 18, 8:39 PM
    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.
    Originally posted by Penitent

    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
    • By alfred64 7th Feb 18, 8:42 PM
    • 4,008 Posts
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    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
    • By sunnysoho 8th Feb 18, 9:46 AM
    • 3 Posts
    • 1 Thanks
    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.
    • Doozergirl
    • By Doozergirl 8th Feb 18, 11:37 AM
    • 25,202 Posts
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    Doozergirl
    £100-120k is a cheap house for the Midlands even. Not an amazing quality of tenant invited to that party.
    Everything that is supposed to be in heaven is already here on earth.
    • LateStarter
    • By LateStarter 8th Feb 18, 11:45 AM
    • 171 Posts
    • 189 Thanks
    LateStarter
    You'll find it difficult to get a But-to-Let mortgage if you don't already own a house. I know London's stupidly expensive, but if you can afford the mortgage payments, it makes more sense to buy something for you to live in.
    • luckbox
    • By luckbox 8th Feb 18, 12:08 PM
    • 61 Posts
    • 104 Thanks
    luckbox
    The Government has recently given first time buyers a no stamp duty incentive, so you would be wasting this if you bought a cheap house just to rent out and then decided to buy in London at some point as you would no longer be a first time buyer.

    This means you could easily have more than a years worth of rental profit used just to pay an unnecessary stamp duty bill
    • Filo25
    • By Filo25 8th Feb 18, 12:12 PM
    • 1,510 Posts
    • 2,214 Thanks
    Filo25
    The Government has recently given first time buyers a no stamp duty incentive, so you would be wasting this if you bought a cheap house just to rent out and then decided to buy in London at some point as you would no longer be a first time buyer.

    This means you could easily have more than a years worth of rental profit used just to pay an unnecessary stamp duty bill
    Originally posted by luckbox
    With the way the political winds have been blowing for a while I would much rather be buying to live in than buying to let out.
    • Mahsroh
    • By Mahsroh 8th Feb 18, 1:22 PM
    • 339 Posts
    • 330 Thanks
    Mahsroh
    £100-120k is a cheap house for the Midlands even. Not an amazing quality of tenant invited to that party.
    Originally posted by Doozergirl
    Agreed with your first point on this thread. Not this one.

    I own a house in the midlands - it's value is circa £100k - £120k. Every Tenant I've had in it so far has been absolutely spot on. Perhaps I've just been very lucky.......

    Nothwithstanding that, as a Midlander, now living in the South East, with a rental property in the Midlands, and living as a private tenant in the South East..... I would recommend buying in London (even though house prices are on the up in the Midlands!).
    • saajan_12
    • By saajan_12 8th Feb 18, 2:42 PM
    • 1,254 Posts
    • 875 Thanks
    saajan_12
    Being a landlord and tenant elsewhere is a very inefficient way, both in terms of tax and your time, and can end up being the 'worst of both worlds' in your flexibility should things change.
    1) income tax on rental income while paying gross rent
    2) have to coordinate with an extra person, LL / tenant for repairs
    3) overlaps in paying rent when you move / your LL wants to sell but voids in rent income when your tenant moves
    4) letting agent fees to pay from both ends.
    5) Pay rent (usually higher than a mortgage for same property) but also pay repair & maintenance costs for your let property.
    • Mahsroh
    • By Mahsroh 8th Feb 18, 2:46 PM
    • 339 Posts
    • 330 Thanks
    Mahsroh
    Being a landlord and tenant elsewhere is a very inefficient way, both in terms of tax and your time, and can end up being the 'worst of both worlds' in your flexibility should things change.
    1) income tax on rental income while paying gross rent
    2) have to coordinate with an extra person, LL / tenant for repairs
    3) overlaps in paying rent when you move / your LL wants to sell but voids in rent income when your tenant moves
    4) letting agent fees to pay from both ends.
    5) Pay rent (usually higher than a mortgage for same property) but also pay repair & maintenance costs for your let property.
    Originally posted by saajan_12

    This. Speaking from experience. 100% this.
    • sunnysoho
    • By sunnysoho 9th Feb 18, 9:31 AM
    • 3 Posts
    • 1 Thanks
    sunnysoho
    Thank you all so much for your sage advice.

    You've all been super helpful.
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