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  • Property Yields

    Getting tougher to get decent yield in the SE



    Looking at properties up to £200k there is very little around with much potential for uplift.

    There's not many options other than a leasehold property within 10 miles of me (W.London) which is quite depressing, but not as depressing as the ROI each month!

    The problem is I still think LL's are investing in the SE in hope of long-term capital growth which I'm struggling to see happening.

    I've run the figures through the spreadsheet and allowing for a 3% CG uplift every year (which I can't see happening), it looks 'challenging' in the SE to say the least.

    Multi-lets seem to be the only way to make a decent return (which is what I've focussed on) but it's getting tougher to find the right properties, and leasehold properties don't lend themselves well to this.

    Yours frustratingly,

    Adam

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    You don't mention holiday lets?  Have you looked into those in the South East?

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    Hi Vanessa,

    I'm not sure in W.London there are too many holiday lets available? I'm trying to keep any future purchases to within a sensible drive as I'm managing all properties myself, can't be doing with LA's any more.

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    Hi Adam,

    The south coast is within 1.5 hours of where you live, and is a holiday let hotspot.  Local holiday let agents will manage the property for you. 

    Having said that, I am sure there would be demand for short term accommodation in West London.  Many people come to the capital for all sorts of reasons - conferences, business meetings, events, visiting family, having hospital treatment etc. - i.e. not always on holiday - but they still need somewhere to stay.

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    Hi Vanessa,

    I'm afraid I've given up trusting companies to look after my properties as they just don't seem to care even though they're getting paid, so if I wasn't managing myself I'd rather not bother. 1.5 hours away is not sounding attractive, as I've found problems can sometimes need immediate resolution on site.

    Thanks anyway.

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    The problem is that there are “cheap” money in the area from people who are happy to only get a 1% more than from their bank account. They do not see property as a business but they have to much money and brick and mortar are safe in their eyes.

    I live in SE and 100% agree with what you are saying so I have stopped investing in my local area

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    Totally agree. A guy I know has 3x properties in the local area and is clearing probably £1k tops off all 3. That's not an investment but a millstone!

    I never underestimate how much spare £££ there is floating around in the SE, looking for something to invest it in.

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    I too am in London and looking for something to invest in and find myself in the same boat.

    I am currently getting a paltry 1.36% on my money - I have even considered (for a short while) buying for £600k which would get me not much more that 2% on my money.

    I have a full time job and also do most of the small diy myself, therefore I prefer to purchase close to home.

    I would look to hold the property for say 20 years and over that time I would expect it to at least double in price.

    It was the SDLT that has so far stopped me going ahead!

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    In general you will find for standard 75% LTV BTL, yield of 6% will not allow you to obtain mortgage if you want to build a property portfolio. Many landlords in London (mostly yielding 2 to 3%) will come to realise this when their current mortgage deal ends and needing to remortgage, to only find out they can't.

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    Standard BTL with 75% LTV will not be able to refinance with yield of 6% in general. And you rightly pointed out, most landlords in London has yield between 2 to 3%. The realisation will come when their current mortgage deals ends and unable to remortgage.

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    I've got a flat on 75% LVT, 4% yield. 2 year term is coming up, but my mortgage broker doesn't seem to think there will be any issue getting a new deal

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