Is London really just a buy to invest hot spot rather than let?

by Readers Question

11:49 AM, 9th June 2015
About 6 years ago

Is London really just a buy to invest hot spot rather than let?

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Is London really just a buy to invest hot spot rather than let?

With the London property boom still going through the roof, will rental yields ever make it a good return to tie up your capital in a buy to let – or simply a buy to invest and sell with the capital gain? Is London really just a buy to invest hot spot rather than let

Is this why so many London properties are simply left empty as they gain in value?




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Mark Alexander

11:53 AM, 9th June 2015
About 6 years ago

Hi Andrew

I think you make some very valid points.

It seems to me that many parts of London are becoming attractive to property speculators. This is very different to being attractive to BTL landlords as the fundamentals are so different.

Speculators are not interested in rental yield. Indeed, why would a speculator risk handing over the keys to such an expensive investment for a return of just one or two percent of capital?

Speculation is worrying, especially if it results in empty property because it further exasperates the housing crisis.

Anthony Endsor

12:17 PM, 9th June 2015
About 6 years ago

I think as far as rentals are concerned in London, we may have reached the top of the mountain. There are a number of landlords actually starting to sell London properties now, simply because tenants can no longer afford the massive rent demands. Of course, a good few of these would have bought the properties cheap back in 2008-2011 during the crash years, and are now hoping to cash in. In a number of cases though, the equity of one property could be enough to put a deposit down on 2 or 3 properties elsewhere. I have heard people are starting to invest in places like Birmingham and Slough.
To me the only reason I would buy a property in London now would be to live in it, as the prices would be just too high to justify them as a worthwhile investment, and there is now no guarantee that London would be the best for a speculator, particularly seeing as you would still have to pay the mortgage AND Council Tax.

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