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27 April, 2017
The changes to stamp duty along with the Brexit decision are just two things that have impacted the London property investment market. The pound fell to record low levels but when the correction in property values is taken into account, Brexit may well have been the nudge in the right direction that the London property market required.
If you are investing in London property, where should you invest?
In terms of preserving wealth and capital appreciation, the centre of London is the prime location. It is likely that the value of central London property will rise by 21% over the next 4 years and values have remained strong because of the short supply and high demand.
Therefore, the problem of deciding between capital appreciation and yield can be solved by investing in twinned markets. There have been 10 pairs identified in London and that are next to wealthy areas and so, they require lower capital values and experience improved yields than the neighbouring areas. This will mean that investors can benefit from price rises as the boundaries between the areas become rather blurred over the years.
Areas that are located along the Elizabeth line are expected to see increases in prices and will be a great option for tenants. Commute times have been cut significantly, making it possible to travel across London quickly. These areas are affordable and are ideal for those who have smaller budgets while yields will be as high as 4%.
When purchasing, you will need to consider the following factors:
1. Choose an investment strategy that is either based around yield or capital growth as this will help to determine where you will buy.
2. A buying agent will help if you are not familiar with London. They will help to identify properties in areas that are right for you and they will then be able to agree a price that is suitable for you.
3. Try to avoid new build developments that have more than 10 units as this will make your property look like many others and this will result in more competition in the market. All you will be doing is trying to attract tenants using a property that is similar to many others on offer.
4. Research is vital, so ask about prices and speak with local agents to find out what properties they have let out in the area and how much it was let out for.
5. Consider the local amenities because this is certainly something that tenants will consider. Good schools, transport links and retail will attract tenants from abroad and within the UK.
6. If you are aiming for a more professional tenant then consider purchasing in a property that has good-looking common area, a lift as well as a porter. These are things that professionals look for.
7. To avoid quiet periods, when the time comes to discuss purchase terms, try to market the property between exchanging contracts and completing.
8. The offer that you receive within the first two weeks of marketing the property is one that will often be the best offer.
9. If you are looking for a hands-off investment, consider using the services of a professional property management company.
10.Spend money on your investment by repainting, updating bathrooms and kitchens and integrating certain technologies as this will make it possible to ask for higher rents.
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