Glasgow/Leeds/Manchester or save for a year to buy in London?

by Readers Question

20:20 PM, 16th March 2015
About 4 years ago

Glasgow/Leeds/Manchester or save for a year to buy in London?

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Glasgow/Leeds/Manchester or save for a year to buy in London?

I would like to invest some savings that I’ve got into a property through buy to let (min 25% LTV). Unfortunately my savings are not big enough to purchase even a small property in London for now. So I have a choice: Glasgow Leeds Manchester or save for a year to buy in London

– save for another year and hopefully get small property in London
– purchase a new build (off-plan) property in Glasgow/Leeds/Manchester

I’ve done some research and looks like yields in Glasgow/Manchester/Leeds are higher than I can get in London (approx 7-8% in those cities against 5% in London). But the problem is that property prices in those cities have mainly fallen in recent 5 years but in London they went in the opposite direction. So yield-wise those cities are more attractive but in long-term perspective London hypothetically wins (as you can make money on selling rather than on rent).

So, bottom line, I’m a bit lost and would kindly ask for local community advise on this.

Thank you

Vlad



Comments

Mark Alexander

20:24 PM, 16th March 2015
About 4 years ago

Dear Vladimir (or should that be здравствуйте?)

I have three suggestions to offer to you:-

1) Familiarise yourself with our Property Research Tool - see >>> http://www.property118.com/property-reseach-tool/

2) Come back in a few weeks time and check out the listings on our new tenanted property portal - pre-launch info here >>> http://www.property118.com/buying-selling-tenanted-property/

3) In the meantime read my guide to becoming a respected and profitable landlord series of articles >>> http://www.property118.com/how-to-become-a-respected-profitable-landlord/60765/
.

Mark Epps

8:33 AM, 17th March 2015
About 4 years ago

Hi Vlad + wider public, fellow newbie here.

I have a portfolio of five properties, bought by selling a house in London two years ago and spreading the cash across a bigger and higher yielding portfolio in Colchester and Manchester.

I think that people look too much at recent price rises in certain regions when they should really be looking at the long term rental future. My attitude is not to try to anticipate future capital movements because none of us really know or can know which regions will go up or down. Build cashflow. The best way to do this is to invest where the yields are best.

I had bought three houses in Colchester before I decided to spread the risk and go north. I've now got two in Manchester and my only regret is not basing my entire portfolio up there. The yields are so much better.

I guess we all have our own models and this is mine.

Best wishes,

Mark

Mark Alexander

8:51 AM, 17th March 2015
About 4 years ago

Reply to the comment left by "Mark Epps" at "17/03/2015 - 08:33":

Hi Mark

Welcome top Property118 and thanks for commenting.

I'm really sorry but I had to remove the link from the bottom of your post as this is in breach of House Rules - please see >>> http://www.property118.com/house-rules-business-sponsorship/
.

Vlad Eremenko

9:00 AM, 17th March 2015
About 4 years ago

Reply to the comment left by "Mark Epps" at "17/03/2015 - 08:33":

Hello Mark,

Thank you very much for your opinion. You made a good point about cash flow - I was leaning towards north and your experience is a great example of success with such move.

Thank you

Vlad Eremenko

9:00 AM, 17th March 2015
About 4 years ago

Reply to the comment left by "Mark Alexander" at "16/03/2015 - 20:24":

Thank you Mark, I will take a look at these resources

Paula Ingram

9:55 AM, 17th March 2015
About 4 years ago

Hi

Also consider Edinburgh, very lively market and values fairly static.

I would be happy to help you if you wanted to explore this further. I have bought quite a few repossessions and often see good deals but cannot save the deposit quick enough!! We currently have 10 BTL properties.

Hope this helps.

Paula

Ian Ringrose

10:10 AM, 17th March 2015
About 4 years ago

If you go north, avoid any areas that have few home owners - there are some very bad areas with good headline yields. (Until you get the 10th boiler stolen in that many years!)

I don't like flats, as the freeholder and management companies makes lots of charge you have no control over.

rav singh

10:11 AM, 17th March 2015
About 4 years ago

Hi vlad

It depends really whether you desire capital growth or income from your investment. You already probably know that it's more likely you will get better capital growth in London and higher income outside of London ie north.

So it depends on each persons individual circumstances there is no right or wrong answer. But my advice would always be location. If you buy in north there are places that will always sell well ie be careful of buying in more run down areas where it can be difficult if you ever need to sell.

Yet these areas are what some people look for especially with tenants on housing benefits. There is a market for everyone just knows your and research it well.

Good luck

Dan Sawyer Cherry Picked Properties

10:53 AM, 17th March 2015
About 4 years ago

Good morning,

London I would say was the no brainer place to invest several years ago. Given that prices are now the highest they have ever been it is nearing what some analysts fear may be a mini bubble. I would only buy in London with a long term view if I was living there, not for investment purposes.

When you mention that many areas in the North have not grown well you are referring to the national or regional averages and so buying well can ensure that the growth / equity performs well.

The average growth may be lower outside of London however for the last few years in London it has been impossible to buy a good deal. This means you are 100% at the mercy of the housing market which Is risky.

I target blocks and streets where I know I can buy distressed properties from vendors that need to sell quickly. This means that although the average growth may be slower that I am not reliant on this. I have made 10% capital gains per annum plus in addition to great yields simply by buying well and adding value.

I have recently left my property investment job and have set up by myself doing this full time. I am now finding more investments than I can handle so I have started introducing fellow investors to them.

Dan Sawyer

Ian Ringrose

11:08 AM, 17th March 2015
About 4 years ago

Dan, I would not recommend anyone from London to try what you do unless the move into the area they are targeting.

Middle class house in the north, on middle class roads are a lot safer bet for someone that does not know the area like the back of their hand.

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