Would you invest in Manchester or London property?

by Readers Question

18:20 PM, 27th November 2013
About 7 years ago

Would you invest in Manchester or London property?

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Would you invest in Manchester or London property?

Hi again

Quick question – I have raised equity through remortgaging my main residence. I have about £80-100K.

I have the option of buying two or three flats in Manchester apparently 10% lower than market price – they are rented out currently and are getting 7.5-8% yield. My thoughts are that with the £800-million being spent on the airport upgrade and the BBC moving there etc it should be a wise long-term investment………….

BUT Would you invest in Manchester or London property?

I am tempted by the new fast super duper cross-rail that is coming to London in the next 4 yrs or so. I could buy a house for the same money near a station that will soon be upgraded to cross-rail in the east end, It will definitely have a positive knock-on effect with shorter commute times, improved infrastructure etc……

So what would you do? How/where would you invest that money? Anywhere else I’l overlooking?

HELP

Much appreciated in advance.

Thanks

Brian



Comments

Ian Simpson

19:34 PM, 27th November 2013
About 7 years ago

Not sure where you live but , being a little old-fashioned, I always go closer to home... You never know when you are going to have to visit the property to evict a tenant, collect rent, view some damage, repair some damage, etc. etc. etc. After ten hard years of property management, I can give you this little piece of advice with complete sincerity

Ed Atkinson

19:38 PM, 27th November 2013
About 7 years ago

If you are in two minds I would go for the local option. My only tenancies that have caused major trouble have been when letting agents are involved. If you can self-manage the properties you'll be better off in cash and in serenity.

Susan Alexander

20:43 PM, 27th November 2013
About 7 years ago

I would tend to agree with the local theme that has been referred to in the other posts, and in addition, I personally prefer houses to flats, as flats usually have management fees and other shared responsibilities that you often have little control over when it comes to costs.

Zulfiqar Hussain

21:31 PM, 27th November 2013
About 7 years ago

Forget the local option, invest where the returns are the greatest.

Manchester has been depressed for a long time and has a lot of recovery to go through before property prices rise. There is a lot of available stock and still many depressed areas.

You should invest in London, prices are rocketing especially in Central London, East London or anywhere near new transport links.

I am an experienced landlord with properties in Manchester and London, so have watched these markets for the last ten years! Good luck.

Don Holmes

21:52 PM, 27th November 2013
About 7 years ago

Reply to the comment left by "Susan Alexander" at "27/11/2013 - 20:43":

Maybe you are overlooking the obvious , You are talking about "commute" the idea is to take people in and out faster, so will the perspective occupier not travel "quicker" to a cheaper area?

I have offered advice to a potential investor today and it is the same in all areas, It really depends on your exit plan? it is always easier to get in than get out, what is the long term plan, for example, pension income, or capital appreciation?

Merseyside is a great place to invest depending on above.

And if you choose the Norther option as an agent we are here to help. Good Hunting Don

Brian Barn

22:32 PM, 27th November 2013
About 7 years ago

Thank you for all your comments..........
So I think I'll do abit in Manchester and abit in London and see what happens..........
Crystal ball - if only
😉

Mark Alexander

8:51 AM, 28th November 2013
About 7 years ago

My tuppence worth ...

Is it best to invest into the trendy property bubble of London whilst we all know the reasons for the increases in values are overseas investors seeing our Capital as a safe haven for the money? What happens when that trend reverses and they think somewhere else is "the in place to be?"

If history repeats itself all UK properties will increase in value over the long term. A good question to ask yourself is whether you are planning to be a landlord, a property investor or a speculator. Are you looking for rental returns to provide positive cashflow now or are you speculating on capital appreciation and trying to pick the best area. It sounds to me like you are more of a speculator and I see that as a far higher risk unless your name is Abramovich.

Remember, whatever you decide, you will be dealing with sales people who are looking to make commission. Some of them will tell you anything to make a sale. That's why it is important to do your own research. We have made this very easy for you, please see >>> http://www.property118.com/property-search-tool/
.

Adam Lewczynski

10:48 AM, 28th November 2013
About 7 years ago

Reply to the comment left by "Brian Barn" at "27/11/2013 - 22:32":

Hi Brian, there are successful investors in both cities (and many other locations) so if you buy wisely in either city you should come out okay if the market stays with you and you can ride any downturn which inevitably happens at some point.

If you are looking for a 1% or 2% higher initial rental yield then you may need to aim north but if you are more risk averse then perhaps opt for a lower yield and a considerably larger rental market (not just the BBC) in London. Also remember that the "London market" is not just the central London playground for the rich. It extends right out to the M25 and some areas just beyond it where values are yields are more attractive.

Also, consider how long you intend investing for and when you might want to cash in. I don't think there's much doubt that for the past few years it's been much easier to sell in London for full market value than it has in other parts of the UK so I would suggest your capital investment is safer in London if the economy takes a downturn again, especially if interest rates start to creep up. We have been buying and selling for investor clients in London for 25 years and I have never had a client sell a property for less than they paid for it.

Also, don't be swayed by the "manage closer to home argument". The vast majority of our investors are UK expats and overseas investors and they have never had any need to inspect their property or deal with problem tenants. Wherever you decide to invest make sure that the person advising you on what to buy knows what they are talking about and not just making a fast buck on a sale. Also invest in an exceptional letting and managing agent, not the cheapest or even the biggest. There are great agents in all towns and cities but there are far too many rogue traders in this industry and the forums are full of landlord tales of shocking agents and tenants. In 25 years we have never had a tenant abscond after failing to pay rent or damaging a property so choosing and managing your tenant is just as important and choosing what to buy.

There are lots of good people on here always happy to advise and hold your hand. Good luck is not always enough so make use of others talent and knowledge and don't be afraid to ask for help.

Adam Lewczynski B.Sc. MRICS

Ivan Ratnayake

0:18 AM, 29th November 2013
About 7 years ago

Again, don't know where you live. Would recommend going away from Flats. Have had both flats and houses. The unforeseen extra costs of flats are the quarterly service charges, and 6 monthly/annual ground rents. Both nasty. You don't get that with freehold properties. And ofu course the charges mentioned can increase on a whim.
Then of course, what happens when another developer sticks a massive block of flats down the road from yours (answer - devaluation).
No, I would not buy a flat again. Go for a house, close to good amenities, 2 bedroom always easy to rent out. You can't really go wrong on that.

Brian Barn

17:52 PM, 1st December 2013
About 7 years ago

BIG thank you to ALL your advice - It is all really valuable and best I can do from what I've learn't if my due diligence 😉
Thanks again
Brian


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