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  • Property-a-holics

    Recession coming - do not invest in the North



    This has been said a couple of times on the forum recently.

    Anyone care to explain why?

    SEE ALSO  -          Smart Landlord Guide 2019

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    As they are cheeky buggers?

    I guess it's because the North suffers greater from Unemployment and House Price falls in a recession? Not sure that is true in the data but It seems feasible.

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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________

    The trouble with recessions, is that they are always coming depending who you listen to.  A couple of lines i love:!!

    1: Economist have predicted 8 out of the last 5 recessions.

    2: If he loses his job its a slowdown, if you lose yours its a recession, if I lose mine its a depression.

    for me, i think you buy assets wisely, at a price your happy with, and ride out the storms you will be fine.

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    Vince Cable was often called the man who predicted 17 of the last 2 recessions.

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    When London sneezes the north catches a cold for years...

    My northern property portfolio has made very little capital growth in the past ten years. Pretty demoralising as it takes a huge effort to maintain all the props that are now being hammered with all the anti LL rhetoric because of the overheated London market. The property I have made money on are one off family homes rather than vanilla BTL.

    There are still many areas in the north that haven't recovered since 2008.

    The North  / South divide is massive!

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    Your so correct

    The south is now going to see what we have witnessed since 2007 very low growth at best and the possibly of house prices falling

    I dont even factor in Capital Growth now

    as long as I have an 8% yeild I know I am buying the right investment property

    Anything Less and I dont buy


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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    If you have decent  yield then a recession passes you by whether you are  in the north or south

    That`s assuming demand for rentals exceeds supply so choose your area accordingly

    But you will retire earlier if you invest in the south because you will enjoy capital growth

    Capital growth is where the real wealth is held in property and that`s principally in the south

    Dont invest in the North if you  want real wealth in 30 -50 years

    If you are happy ticking along on decent yields then the North is fine

    But when you hit 60/70 /80 you will probably still have to tick along to get the income

    In the South you can just sell up and  protect your  ticker from the burden of ownership

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    Jonathan Clarke. http://www.buytoletmk.com

    But what's the point of having all that wealth in your 80's, when you can't enjoy it?

    Have a balanced portfolio, some potential for capital growth and paying some yield now so at least you have a nice little side income (at the very least!) that you can enjoy in the meantime. 

    Besides, its your cashflow that will save you in a recession, not your capital growth. 


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    Yes  as I said decent yield ( cash flow ) then a recession passes you by . I agree

    Your priorities change though when you hit the 80 -100 bracket

    Sell half - pay down half

    The meals out / holidays / cars / entertainment running costs of life start to slow down @ 80

    But  A live in carer is maybe 50K pa so those maintaining health and independence costs rise

    A  SE 1 mil portfolio @ 7% yield may double in value 15 yrs then doubles again in 15 yrs = 4 mil

    Or

    A  NE 1 mil portfolio @ 10% yield that maybe struggles to double in 30 years =  2 mil

    I prefer the first  as 2 mil when you are 80 buys you a good chunk of live in care

    If you rely too much on yield then the care costs may not be there if you want to sell up @ 80

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    Jonathan Clarke. http://www.buytoletmk.com

    I think we completely agree here Jonathan -just differ maybe in our time horizons ... I'm probably focused more on residual income in the meantime as opposed to a retirement income, down the line.  But totally agree with your point, long term wealth will be from capital gains and not from yields.  

    However I wouldn't completely discount the north though.  Many London employers (and the Government) are now relocating (at least some of their jobs/employees) to the North. It could be a turning point for the economy and the north-south divide.

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    ``However I wouldn't completely discount the north though``

    Indeed not -

    If I came from the north i would scale up massively for yield and save that cash flow to buy more

    Buy every 6 months then every 3 months then every month then every 2 weeks then every week

    You could reach perpetual motion in time and just be constantly buying  50K units cash

    Get to about 500 units then stop

    But 500 units brings another  whole set of problems with it  and many wouldn`t want that hassle

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    Jonathan Clarke. http://www.buytoletmk.com