The capital city of London has been a magnet for overseas buyers in recent years and prices in some areas of this ever-popular world famous destination have responded accordingly to the surge in demand.
Despite prices reaching eye-watering levels in some specific hotspots, there are definitely some areas in and around London that offer buyers an opportunity to buy a property that would make a great main residence or rental property.
Here are some tips and advice to help you find the right property by asking the right questions before you sign on the dotted line.
Ticking all the boxes
One of the fundamental aspects of buying a property is the need to tick as many boxes on your list of what exactly you are looking for in a property and what you need in order to satisfy your investment needs as well as your living requirements.
If you are an overseas buyer, you need to look beyond the current state of the property market in the area you are looking at, and consider how your intended purchase fits into your financial plans and what legal and taxation challenges you face in acquiring a home in foreign country.
If you are already in the UK and looking to add to your property portfolio, decide what your short-term and long-term investment goals are and whether you will need the capital that will be tied up in the property. Asking these questions will help you to choose a property that suits your personal financial position and allows you to make an informed decision by buying a house or apartment that delivers on rental returns and capital growth.
If you want some guidance on finding suitable properties, learn more at Hetheringtons.co.uk and maybe some other suitable agents who you can aim to build a rapport with and use to find you what you want.
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Check your tax position
If you are buying a property as a second home or a rental property rather than your main residence, you should take specific tax advice from a suitably qualified accountant or expert in property matters.
Capital gains tax and inheritance laws are two specific aspects that need to be clarified before you actually complete the purchase and create a potential future financial headache if you do not plan your finances and tax situation beforehand.
Location is key
There are times when you have to compromise on your options but whilst some minor aspects about a property are often easy to resolve at a later date, you can’t change the location.
Owning a property in a desirable or convenient location will trump most other aspects and you should therefore aim to pay as much as you can for the best location you can get for your money, as this strategy will often be rewarded with a better return on investment when selling and strong rental interest in the meantime.
Paying the right price
There are always a number of new developments that can look very attractive to buyers, especially when you consider that you get guarantees against any defects and the property will be in pristine condition.
The downside is that you will potentially be paying a premium for buying a new property and this could mean that you might not be able to recoup the asking price if you have to sell in the short term.
A new development might suit your needs but do consider older properties where you might get more for your money and have a better chance of negotiating a lower purchase price.
Consider the proximity of public transport
Traveling in and around the London area is often cost-prohibitive in a car with the Congestion Charge amongst other reasons why many commute using the trains and buses available.
Make sure the property you want to buy is close to good public transport facilities. This will make it much more attractive to tenants and also tourists who want a base to explore the capital with ease from.
Do your sums
If you are buying a property for rental purposes, make sure your finances can withstand the inevitable rental voids that do occur from time to time.
Try to stress-test your finances to see if your cashflow allows for an increase in mortgage rates and a drop in rental income if you have to take a deal to attract a new tenant.
All of these aspects are important and as long as you take your time to select the right property that is in the right area, you should be able to grab a slice of real estate in the capital that will serve you well.