It's a numbers game
23 June 2015
Clients come to us with many different criteria. None are more contrasting than those buying a property as a home to those wanting to invest in a buy-to-let.
Take two clients, each with a budget of £1million. One is looking for a London home. The other wants an investment property in the capital. Two very different briefs.
For the client wanting a home there is much more emotion involved in the process. It’s not so much about the money rather the quality of life. Location is key as it’s about access to the things that are important, whether that be an easy commute to work, being able to walk to a favourite restaurant or a quick exit out of London at weekends. Other factors that might be important – the aesthetics of the building or having outside space – come with a cost both in terms of the value of the property and of maintenance.
By contrast, for the 1.4 million people in the UK who have rental properties, the decision on what and where to buy is driven more by the financial returns, be this long-term capital growth or short-term rental yield. Stripping out the emotion and putting the emphasis on the type of property and its location are key. In London the high property prices can make the search more complicated. With vast swathes of London being re-generated it can be hard identifying the areas that are best placed to guarantee tenancy occupancy and good rental yields. Buyers also need to weigh up the potentially better capital growth of older properties that may need more maintenance against the new build market which tends to be easier to manage but may not give the same amount of long term value increase.
Sometimes our clients throw into the equation the desire to buy an investment property that will in time be lived in by their children. Perhaps this is the most complex of briefs as being able to predict the up-and-coming areas that the next generation will be drawn to needs analysis and an understanding of the marketplace.
London’s property market is as exciting as it’s ever been. As the prices in prime areas have increased it has given a new lease of life to many of the areas further away from the centre, opening up opportunities in more affordable locations. The choice of areas for buying homes and investment properties is as diverse as it is challenging.