Can you make money on property in London anymore?

[emmeee]

Had dinner with some cousins who are a lot older (50s) than dp and I. They have made huge amounts of money through renovating London properties. Oh and buying back in the 90s.

They advise to buy a small flat and do it up then sell a year or two later. But I’ve run the numbers on some properties and after stamp duty, there’s literally no money to be made? One two bed flat estimates came in at making £5k which we all know would be eaten up by an unexpected cost.

But you haven't actually sold yet?

No, I would buy in a cheap city and put it on air bnb if I was trying to make money out of property

You can definitely still make money if you have money to invest, yes.
If you are borrowing to invest that's a much more complicated answer and largely depends on both your buying skill and refurbishment abilities.

@Shibr have you sold it at that increase, or just got it on the market for that price?

In the 1990s the property market was very very slowly recovering after a catastrophic crash. There had been lots of repossessions and when I first bought in South London in 1993 many properties had literally halved in value. Almost every property I saw was either a repossession or a flat being sold at a huge loss by a vendor trying to avoid repossession. So many of the flats had had everything sellable torn out in a desperate attempt to claw money back - boilers, kitchen units etc, all torn out. If you bought at that kind of historic low, then yes, you were going to see a huge increase on your investment once the market started rising, however the situation today is so very different. As you say, back then when prices were so much cheaper, those cheap flats were under the stamp duty threshold. Now you are gambling with huge amounts of money, needing to see much bigger rises to get a profit at the end, and the room for the market to grow is far smaller.

Sale agreed, just waiting to exchange. They offered slightly over asking. This has been common occurrence in the last 6 months locally.

Yes sweat equity

I am sure it is possible but probably a lot more difficult these days for a number of reasons, not limited to :

a) Falling market.

b) Extra issues regarding purchasing of flats, eg cladding.

c) More people around who know of this opportunity and will fight for bargains.

d) Being a landlord a less attractive proposition than it used to be.

e) Renovation getting a lot more expensive to do. Also lots more cowboys around and time to renovate taking longer which is a killer in a falling market.

Let's hope not. It should never have been allowed to happen.

If you buy a London flat now and sell it in a year you are virtually guaranteed to lose money. You’d need to pay conveyancing, stamp and voids. Capital gain is unlikely to cover that.
The bubble couldn’t inflate indefinitely thank goodness. The poor young people.

Do what my neighbour has done spit a small house into 7 studio flats and rent them out to crack head dealer for 1000 a month and make 7k a month. Your cost will be covered by first years rent.

My builder says you need to be looking at clearing around £100k profit to consider a "doer upper". Anything less than that will get eaten up by contingency, taxes, estate agent costs etc.
London I think is a no go these days

Ooh I’ve never seen Kirsty & Phil suggest that.

I think they receive enough abuse already.

I disagree I still think you can make money but you have to do more than just decorate/renovate. Check out Ahmed Khan Property on youtube

😂