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London - where would you buy for £750k(28 Posts)
It looks like we will be living in accommodation linked to my husband's job for at least another 15 and probably more like 30 years (we thought we'd try it out before we committed to anything, we've been there a decade now so doesn't look like we're going anywhere).
We want to buy something in London that we can rent out while we have to live in DH's tied accommodation, and then when DH retires we can either live in it ourselves, or sell it and buy elsewhere in the UK. We're worried if we don't buy something now we'll get to retirement and then not be able to afford anything and also not eligible for a mortgage. We don't own anything else.
I'm somewhat overwhelmed, especially because we may or may not ever live in this place so it feels less personal than I ever thought buying something would feel. But then again, if we like it then maybe other people will and if we ever have to sell it it will have held its value. An area that is up and coming would be good as well but we don't want to get trapped in expensive new builds like around Nine Elms that everyone keeps telling us will lose their value.
If you had a budget of about £750k, prefer 2 bed but would consider a big 1 bed, and no need to live near particular schools or work but prefer to be more central if possible, where would you buy?
I wouldn’t buy a one or two bed in central prime London as you’d get rubbish rental yields.
I think it’s worth considering a small house near Greenwich or Blackheath. Greenwich has lovely architecture and is by the river. Blackheath Village is very charming with a great selection of fancy shops and cafes. However, it does get quite a bit more deprived around there quite quickly. You could afford a house within walking distance and in 15 years it should be more gentrified.
Or if you want somewhere that is very established already, then have a look around SW London, eg Wimbledon, Richmond etc. It’s basically all gentrified, safe, fancy shops and restaurants, great green spaces etc.
Sorry, point being that I think Greenwich/Blackheath way has the potential be a good investment. SW is all lovely but better value and safer than N London and you’d get better rental yields for a 3 bed flat/ 2 bed house than a one bed in a central location.
Ooh what fun! If I had money and no kids, I'd be back in Clerkenwell like a shot. I haven't lived there for about eight years but it is a lovely mix of bustle and fun around Smithfield Market, great shops in Angel, but also very peaceful at the weekends. The only disadvantage is a lack of green space, we found, so it depends how important that is to you. I would have thought the rental/resale market round there would be fairly stable as it's so close to the City, and you could certainly get two bedrooms for your budget (though might not be a huge flat).
We moved from Clerkenwell to Dalston which seems to be developer central at the moment, I'm not sure that would be a sensible place to buy as my sense is that supply is outstripping demand, but you might also look along the Regents Canal or up into Canonbury (where you can get some lovely period conversions). However, those might have more maintenance issues which would be a pain if you're a landlord.
We've had a rental flat in Angel for 14 years now and it's never been empty for more than 8 days and has more than doubled in value over the years. It's a great location for people working in the city, Clerkenwell, Kings Cross etc. Lots of nice shops and restaurants and quite a few green spots + Highbury fields.
Chiswick is very popular. Less quiet at the weekends! Lots of parks. I’d look there. I also think transport links are important. What will you do with your spare time when you live there? What do you want from your neighbourhood? I think looking ahead 30 years is very difficult.
I agree Nine Elms isn’t where you want to be but Battersea will have the Northern Line extension and there will be the Elizabeth Line quite soon which opens up possibilities.
If you are buying for your retirement why are you looking in london? Most people leave london when the retire dont they?
alexalee a lot of my parents friends have downsized from the suburbs say zone 5 to a 2 bed flat in zone 2/3. They're retired, in good health, have free travel across London and love it.
I'd go for Angel OP.
Oh, re Nine Elms - I find it’s getting a little over developed. However, other parts of Battersea are worth considering. Gentrified, short walk to Chelsea, the river and Battersea Park is nice. There’s quite a lot of social housing, though. I think I prefer it a bit further out - the Between the Commons area the other side of Clapham Junction or the bit by Wandsworth Town station.
alexa we aren't sure whether we might retire to London or not - we both like the city, but who knows how we might feel when the time comes. Basic theory now is that if we have a flat there we can rent it for years, and if we don't want to live there then we can sell it and buy a place in Cornwall or whatever. But if we buy a place in Cornwall, it's unlikely that we could sell it and buy a place in London, and in addition it's a long way away from us if something goes wrong with it in the intervening years. And I don't think the rental yield would be so high (though I haven't looked into this).
So many options! JoJo are you my DH, he suggested Wandsworth town and Greenwich just this morning...!
Bubbles you sum up my difficulty, it's hard to figure out whether things like green space or what our interests are likely to be in 30 years should matter given that we might never live in this place. It's almost like we should just close our eyes to everything bar the rental yield and just go for that alone, maybe all the nice things like green space and lovely shops is just a distraction.
Although I just looked at this: www.totallymoney.com/buy-to-let-yield-map/
Maybe we should be buying in Liverpool?!
But fundamentally, we might/probably want to live in London someday and we are closer at the moment in case of emergency (though we would get an agent). So seems better to buy one property in London than 5 in Liverpool, even if the rental yield is higher in Liverpool.
Lol Sound like your husband is onto sth
One thing to bear in mind is CGT on rentals. If you sell without ever living in the property, you’ll get fleeced. I think I’d buy somewhere where you could see yourself living at least for long enough to avoid the tax bill (I’m assuming that over 30 years the value will go up considerably even just because of inflation and not necessarily any real increase). For that reason, I’d want somewhere smart with good transport links and greenery.
Anyway, rental yields are generally peanuts in London, it’s more about getting enough rent to cover your tax bill and service the mortgage. The real investment is the capital appreciation.
Nine Elms is in planning for even more development. I'd look somewhere more traditional, Chiswick, Clapham, Balham, Brixton even St. Reatham or further out towards Forest Hill / Dulwich.
People will always want to live in those areas, great family houses and the areas are occupied by families not those investing and creating dead zones. 750 would just about get you something now.
Oh good point about the CGT. We're not really into this as an income generation thing - more to have somewhere to live in the fullness of time since we are in a golden handcuffs situation of tied accommodation and don't want to end up homeless at the end.
And the capital appreciation is important - but where would be a dead cert over 20-30 years! Will definitely be looking at Greenwich, Wandsworth, Angel, Clerkenwell. Any views on Kennington...?
Please feel free to go window shopping on Rightmove on my behalf...!!
Your aim is to get enough capital to buy a home when you retire.
I think you should stop thinking about where YOU might like to live because you will be different people when you retire and your needs will have changed. Make that decision when the time comes.
If you are set on property talk to an estate agent and find out what will get the best rental yield/appreciation on a property. Central London gives very poor returns on capital.
You should first talk to a financial advisor and work out whether there are other investment vehicles which would offer more than property over the next x years. These may be more profitable and less hassle.
You may also need to consider capital gains etc on what will be a second home.
keyboard good point on seeing a financial advisor. We will do that.
We don't ever intend to have a second home, it will be our only home since we live in accommodation linked to DH's work where we are required to live, no choice (think army base). If we don't want to live in this flat on retirement we will sell it and buy elsewhere. We can't really get a straight answer out of anyone as to whether this property would be a second home or not as we don't have another home.
The property won’t be your main home so for tax and mortgage purposes it’ll be treated as a btl or second home depending on whether you rent it out or not. And it’s actually a good point that with the rental yields in London and you not being sure what you might like in retirement, you could look at other investment vehicles.
Most people leave london when the retire dont they?
Not if they're sensible I find LOL
It's lovely near me in muswell hill / Highgate / crouch end. Lots of green space. 30 mins to central. Good quality of life
Archway is not too fancy yet very close to more expensive Highgate (but a touch closer to centre (still zone 2, Hoghgate zone 3), Chiswick (nearer the tube part) or Battersea (bet bits).
*best bits and sorry for the other typos!
I've also cone on to say angel or Islington.
I don't think the tax situation is as clear cut as described above. If you only own one property you can nominate it as your main residence even if you spend periods living away from it - and if you have to live away from home because of your job, as in OP's case, there are tax exemptions there as well. It's really important to take professional advice on the tax situation as it can save you a lot of money.
Stoke Newington, Canonbury, Barnsbury, Highbury