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The Chink in the market

6th Aug 2016

I saw three properties on the market yesterday, all said to be discounted. The post Brexit fear is still in the air. The concern is if you buy now will the price drop even further months down the line? Who knows for sure?

Two were around the £1m mark, the other was £650k. Six months ago all of these properties would have been snapped up. Now we are in a different environment. One where the buyers have taken back some of the control. It’s a buyer’s market, one which should be exploited.

But how can one ensure the price will not decrease in months to come? You cannot, that is the simple and truthful answer.

The way to ensure your purchase is a sound one is to change your focus. As the buyer is now in a position of choice this choice now should be used with great discrimination.

If capital growth cannot be relied upon at least in the short term, the emphasis should go to rental income. Ensure there is cash flow month on month, this way whether the price of property goes up or down your money will flow in.

The bulk of money to be made from property is always from the capital growth, not from the income. The growth is driven predominantly by location.

The trick is to increase the yield whilst purchasing in a strong location. We are pursuing the same strategy with three properties at the moment, in Notting Hill, St John’s Wood and Marylebone. Not areas which are known for yields. However after studying the planning ourselves very carefully over a period of months, we are now in a position to execute the project in St John’s Wood. Hopefully replicating the model with the other two properties in the pipeline.

Once the project is complete, we will be looking to attract a yield of circa 5% which is now a mean feat in prime locations.

BUY TO LET OPPORTUNITY

Maida Vale, London, W9 Purchase Price: £650k

  • A freehold house in excellent location
  • Parking
  • Garden
  • Probate sale
  • Close to Maida Vale tube station
  • Needs refurbishment

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