If you were buying a property as an investment, would you buy in Stratford, London. Or elsewhere in London?

[WellTidy]

We have about 170K to invest, and, with a buy to let mortgage, can borrow about 350K or so more. Stratford sprung to mind as it already has good transport links (with Crossrail to come), Westfield and the Olympic Park on the doorstep.

We are looking to buy a flat that will rent out easily, with potential for capital growth. We don't really have time for maintenance, and don't live that locally, so we would be looking to buy new and are happy to pay the service charge.

Would you buy, say, this flat for 500K, two bed two bath, views towards Westfield and the Olympic Park?

We are also toying with buying something at around the 350K mark instead in the Royal Artillery complex near Woolwich, again as an investment, but we would have to rent it out. Any views on the investment potential for that? Crossrail is due to go there, and the cable car is already there.

Or, finally, we are considering buying two flats near where we live in the south east, at about 250-300K each. I don't think they would appreciate hugely as there is no investment coming into the area, but they would definitely rent out easily and we would be on the doorstep for maintenance and repairs.

But then Lewisham is due to have huge capital investment, and maybe that would be a good area to buy a new flat in too ...

I would tend towards two flats, spreading the risk and allowing me to sell one if I ever need access to capital.

However, I agree London would be best location. Perhaps two cheaper (even 3) 1 or 2 bedders in Sidcup/Eltham/Bromley areas?

Yield may not be so great though.

Id say not SE if no potential for capital growth. Your decision should be based mainly on rental yield.
Having said that, being a landlord is not for the faint hearted and is a serious commitment, there is loads you need to know.

Look at the areas in the new cross rail . Stratford has already benefitted from Olympics and Westfield so prices already high.

over £3k / year service charge would put me off. I'd also be inclined against the type of property where there will always be a lot of identical properties available for rent and driving rental prices down

Have a look around Battersea Power Station. You probably won't be able to afford anything within the new developments that are going up at the moment, but the ones which are 5 years old will still be in great condition, and will benefit hugely from the new infrastructure in the area.
The American embassy and big businesses moving in means they'll be a great corporate let market as well.
Something like this, for example:
www.zoopla.co.uk/for-sale/details/35790180?search_identifier=a13df9cfbf74facc121ccba188adf675#uBY5kDGIMuFbBavI.97

If you are looking to make some money in the next few years id go a bit further out. If you look along the line out of Liverpool Street via Stratford that goes through Ilford, Seven kings, Chadwell Heath you could buy 2 properties and the prices round there are rising fast and I cant see it stopping with the imminent arrival of Crossrail to look forward to.

Thanks everyone. I'm sorry to be late back to the thread.

sparechange that's a really interesting suggestion. Its an area I hadn't even considered, as we were focussing on two bed flats, but I can see how that area would be a really good investment. I'm quite excited about it.

If the rent can pay the mortgage element of the sale price, we wouldn't be selling for years. That is, assuming we don't have a massive change of circumstances.

yyyuuu Ive looked at Bromley, as that's where we live. So maintenance and tenant queries would be easier to deal with. For transport links, I've been looking at flats which have good access to both Bromey North and Bromley South stations. There isn't much, and what does come on, goes very quickly. I had my eye on a small doer upper cottage for 275K (2 bed) that flew last week within hours of coming on. I'm now registered with agents though, so we will hopefully be more on the ball.

mini Which areas around new cross rail wre you thinking? New cross itself? I've only ever driven through.

Tranmere I get what you're saying about a glut of identical properties. It is something that has given me cold feet in the past. But we used to live in Limehouse (E14) and I've watched flats prices go through the roof there over the last 10 years. And they're all very similar 2 bed flats, and thousands of them. Its a big decision, but I think we need to be bold.

Basin Are those areas (Ilford, Seven kings, Chadwell Heath) ones you woudl recommend? Crossrail would certianly have a ripple effect, and the central line is already there.

My parents have had good results with studio flats in the Barbican. The rental incomes work out as roughly the purchase price per week - e.g. bought for £350K equals £350 per week rental - and the values have continued to increase even during the recession.

But maybe they've just been lucky...

I think Dagenham is a good bet at mo. You can buy two for price of Stratford one.

I have a feeling capital gains in London property will slow down considerably in the next few years so I'd look at properties which will give me a better rental yield. If you can a student propert in the northern powerhouse cities which will be getting large government investment.

Look in Ealing /Acton near the Crossrail stations there. Journey times will plummet on that side of London, not so much on the eastern side of Crossrail.

You are right to look for some infrastructure change as an impetus to increasing values, rather than just relying on general price inflation.

If you're thinking lewisham, look at brockley/telegraph hill/new cross.

Lots of lovely Victorian conversion flats, plus proximity to goldsmiths for rental and overground lines/night buses.

Especially close to haberdashers and Prendergast schools. Now haberdashers has gone over to home/school distance, property close by will rocket.

Just watch the service charge on any flat you buy. Some of the new developments charge a huge amount which will affect the return you get on a buy to let.

I'm looking at a couple of btl properties in the Croydon area. There's a lot of investment going on in the area and the transport links from there are second to none. You could probably stretch to two, if not three fairly basic flats which would give a reasonable return on your investment.

I like Battersea and think it will get better and better. Croydon is another option, I have friends in the area and they tell me it's got lots in the pipeline including a new Westfield on the Purley Way apparently. SW London is great from a rental potential but most areas have already reached their peak with only small pockets that remain affordable.

The new Westfield is a redevelopment of the existing shopping centres - Whitgift and Centrale. It was all passed at the beginning of the year and the station redevelopment is almost complete.

Second that cactusannie, sadly effects outside London also where people sell up their London pads and push up prices in other areas. Wouldn't worry though as the system is screwed with a lot of people stuck with mortgages they will never pay off and stuck with a life of debt servicing. The worrying thing is a government could tax buy to let to the hilt one day which would release a hell of a lot of properties for people to buy and live in ;) somehow though since most people in the government have some link with property and buy to let this probably won't happen.

YY Cactus Annie.

Fuck off with your buy-to-lets-as-an-investment-in-London!

Londoners are the most hard done by in terms of being priced out of their own city. Forget all the people moaning about not being able to afford to buy in their Cotswold village or Cornwall seaside town, nowhere is as insane as London for property prices.

Go and invest somewhere else (if you absolutely must).

I was a Stratford landlord for years. Rental market there is thriving due to transport links but there are shed loads of new flats and not all are good developments. Some do well, others go downmarket fast. Values in new build often drop as people pay too much off plan in the first place.

Stratford had a very hot year in 2013 (as did lots of London but E15 had a huge bounce) so prices are already high. Even so £500k for 2 beds there is steep. And an untested "luxury" new development whose rental yields are uncertain? Don't think so. Go for a terraced house in reasonable nick instead. Leyton has loads a bit cheaper than Stratford.

Guys there is nothing wrong with buy to let if the owners are good landlords. I had a BTL flat in London and kept the place in great shape and rental increases tracked my costs. That meant that most years I didn't increase rent as increases in taxes was offset by the decrease in the mortgage.

London has become unaffordable due to foreigners coming in and buying everything up. They get to live in London for part of the year and don't pay any taxes on income earned income from their very lucrative business that operate outside of the UK. These are the people who should be stopped, not the OP who has not doubt worked hard to make the money they have built up with post tax monies.

This thread has left me cold. I'm sure the OP didn't post to have moralistic judgements, but fucking hell, invest in a start up company or something, not in a home people may want to live in with security and make alterations to without having to bloody worry all the time.

People's selfishness astounds me regularly. But fuck everyone else, as long as they're alright jack.