Podcast Summary
Rob and Rob advise Danny on investing £35,000 in a London property: Consider areas with good transport links, potential for growth, and a strong rental market when investing in London property. Research carefully and consider hiring a property management company.
Danny, a listener from London, asked Rob and Rob for advice on investing the remaining £35,000 of his £70,000 budget in buying a flat to live in and invest in the long term. He is open to various areas and property types within London, with a maximum budget of £270,000. Rob and Rob acknowledged Danny's dedication to their content and expressed their appreciation for his support. They encouraged him to consider areas with good transport links, potential for growth, and a strong rental market when looking for a property to live in and invest in. They also suggested considering a property management company to help manage the investment property. Overall, their advice was to prioritize research and careful consideration when making a property investment decision.
London's high prices present opportunities outside the M25: Investors can find capital uplift outside London, like areas that have seen significant growth in the past 5 years, but it's crucial to consider growth models and cycles to identify untapped potential.
While London has strong fundamentals with low supply and high demand, the prices may be too high for some investors. However, there are still opportunities for capital uplift in areas outside the M25, like the one discussed which saw a 45% increase in property prices over the last 5 years. It's important to note that not all markets are created equal, and while Manchester has been a popular topic for investment, it may have already seen some of its significant growth. Understanding growth models and cycles can help investors identify areas with untapped potential.
London's growth comes with high prices and compressed yields: Consider regions with faster growth for higher returns as London's market reaches saturation
While there is still potential for investment in London and the Southeast, the rapid growth in these areas has led to high property prices and compressed yields. As a result, investors may find stronger returns in other regions where growth is faster than in the capital. Additionally, London's rental market has reached a point where rents cannot go much higher without significant wage growth, which could limit potential capital uplift for investors. Ultimately, while there is still value in London, it may be more beneficial for investors to consider other areas for maximum returns.
Consider investing in less desirable areas of London for long-term growth: Invest in up-and-coming London areas like Tottenham, Elephant and Castle, Leighton, Croydon, Catford, and Barking for potential property value increase due to ongoing investment and modernization
If you're looking to invest in property in London for long-term growth, consider areas that are currently less desirable but have potential for improvement and increased demand. These areas often have lower prices compared to more established and desirable neighborhoods. Examples given include Tottenham, Elephant and Castle, Leighton, Croydon, Catford, and Barking. These areas are undergoing significant investment and modernization, which will increase their desirability and property values over time. So, while they may not be the most desirable spots at the moment, they offer good value for those looking to invest in London real estate.
Finding value in London despite market conditions: Despite London's overall investment potential not being ideal, there are pockets of relative value within the city for those with flexibility to live there.
While London as a whole may not be the best investment location at the moment, there are still pockets of relative value within the city. The speaker emphasizes that even in a market where the overall investment potential may not be ideal, there are always opportunities for value. If you have the flexibility to live in certain areas, it's worth exploring those pockets of value. This perspective doesn't contradict the idea that London might not be the top investment destination, but rather adds a nuanced perspective to the conversation. If you have any questions, don't hesitate to reach out for answers. We'll be back next week with more insights.
