Don’t be put off by Brexit blues - here’s 10 factors you need to consider in order to make a sound property investment this year…
1. Follow infrastructure improvement
If an area is experiencing infrastructure investment, it’s likely benefit from a boost in both rental yield and capital appreciation - even in a weak market. As we’ve seen in the last couple of years, big infrastructure projects like Crossrail have a huge impact on property prices, so look out for new projects and invest wisely.
For example, though the Night Tube has only just launched, it’s already creating property hotspots in the outer Zones along its route.
If you’re investing for the long-term, look at the Crossrail 2 map. We’re already seeing possible hotspots emerge, including Wood Green and the “Haringey Ladder” - an area set for gentrification.
2. The high street speaks volumes
The high street is a good indicator for whether an area is declining or has potential for growth. If you’re thinking of moving to an area, ask yourself the following questions: are shops boarded up or closing down without new shops moving in? Is the council spending money smartening up the area and ensuring it’s kept clean and tidy? Are there any signs of potential changes or improvements?
3. Are there good schools in the area?
You can also judge the prospects of an area by looking at the nearby schools. Even if starting a family isn’t on your do-to list, or you’re investing in a buy-to-let, London’s growing population has meant securing a school place is becoming increasingly difficult - and catchment areas are getting smaller. It’s for that reason that both renters and prospective buyers will pay a premium to rent or buy in a catchment area.
4. Home first, investment second
When buying a property to live in, try to think of it as a home first and an investment second. If you’re planning to live there for the long-term then little bumps in the market shouldn’t affect you. London is a resilient city - as we’ve seen time and time again - so if there is a price correction or fall in the next few years, it will be insignificant if you plan on being there for another ten. Ultimately, no one can predict the market.
5. Getting a great mortgage deal
To make sure you get the best mortgage deal, you need to choose broker who has access to the whole market. A lot of brokers operate on a panel, so when they say they’re getting you the best deal, what they really mean is the best deal from their panel. Lending criteria changes daily and interest rates are lower than ever before, so it’s imperative to shop around. That goes for investors who have used the same broker or lender for years - too!
6. Use a good solicitor
Cheap solicitors will inevitably cost you more - fact! Buying a property is likely to be the biggest purchase of your life, so it’s definitely worth paying for the best advice. The market is changing day to day, so avoiding delays thanks to quality legal aid could be the difference between concluding the transaction or not.
7. Choose the right estate agent
When the market isn’t 100% stable, it’s extra important that you choose a local estate agent who really knows the area they operate in, rather than an agent who just advertise your property and wait for the phone calls to come in.
A proactive agent should be able to perfectly match buyers and properties, and use their knowledge and experience to value your home correctly. It’s important to remember that most high street agents have a ‘no sale no fee’ policy, so they have as much vetted interest in seeing the transaction through as the seller and buyer.
8. Create an investment plan
Most landlords or investors will take a two year fixed mortgage, but with buy-to-let lending criteria getting tighter, some of the better deals in terms of loan to value can now be found at a five year fix.
We can’t predict the property market, so you must make a plan of action if the worst happens. For example, if you plan to sell up or re-mortgage at that point, you also need to plan for what it will mean if that’s not possible.
9. Add value to your property
Look for ways to increase the value of your property if you’re selling up to buy something else - whether it’s through giving the exterior a fresh lick of paint, getting a new kitchen, or structural work such as a loft extension.
Yes we’d all like an indoor heated pool and a walk-in wardrobe, but it’s important to be realistic with your requirements and actual needs. It’s all about compromise when buying property - and the sooner you can accept that, the quicker your search will be.
Are you considering buying property in London? Give us a call on 0207 099 4000 to find out how we can help.