29-10-07, UpMyStreet ©
With some areas experiencing a slowdown or even fall in property prices, investing in property is becoming a more risky business. But there is still money to be made from buy-to-let and property investment. According to Paragon Mortgages, average rental incomes are up nearly seven per cent in the past year.
In a more turbulent property market, investing in a location that is up-and-coming rather than already popular will give you the biggest return on your investment. Here are ten key indicators to identify a soon-to-be desirable area before everyone else does.
1. Desirable neighbouring postcodes
Look for an area that borders an already popular location. Buyer and rental demand for property will usually spill over from highly desirable areas to neighbouring districts, and these areas can become more popular themselves in the long-term through this association.
In particular, look for neighbouring postcodes that have a similar housing stock and roughly the same transport links, neighbourhood demographic and local amenities. A rise in popularity of the less fashionable area should be realised once people see the advantages it shares.
2. Future transport extensions
Good transport links are one of the biggest factors drawing buyers and renters alike to a location, and automatically add a premium to a property's price tag. Look for areas where there are plans to improve local transport - extra rail or underground links, a new bypass or road extensions. Transport plans are publicly available at your local council.
Be sensible when it comes the exact location of your investment. While proximity to transport links is important, buyers and renters will be put off by a busy bypass or noisy train station on their doorstep.
3. New development
Investing in an area about to undergo regeneration is a no-brainer - the biggest return will come from successfully identifying the local areas that will benefit the most, says Pierre Williams, of property investment experts Inside Track:
"Everyone knows that the Thames Gateway is destined for massive growth. But it's a big area. So you must consider which specific locations in it might perform best. The areas adjoining the Olympic site and Ebbsfleet, because of its new high-speed rail link station, should do very well."
4. Emerging student areas
The buy-to-let market is perennially healthy in university towns. Paragon estimate that landlords letting property to students achieve a return 25% greater than other buy-to-let properties, and highlight Middlesbrough, Chester, Huddersfield, Leicester, Hatfield, Ipswich and Canterbury as the areas with the strongest buy-to-let potential, based on student demand and current average prices.
Even better is finding a student location that hasn't been cornered by other investors. Keep an eye out for new university campuses or colleges opening in different parts of town.
5. Modest price growth
It can be tempting to invest in an area with a strong track record of property price growth, but this also means it could have reached the ceiling of its price potential. You'll make a bigger profit investing in an area experiencing average, rather than explosive, growth. With property more reasonably priced, your up-front investment is lower, and there's still the potential for prices to grow if you pick the right location.
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Everyone knows that the Thames Gateway is destined for massive growth. But it's a big area. So you must consider which specific locations in it might perform best.
Pierre Williams, Inside Track
Once scruffy, now fashionable areas:
- Shoreditch, London
- Leith, Edinburgh
- Chorlton, Manchester
- Crookes, Sheffield
- Northern Quarter, Manchester
- Clapham, London
- Moseley, Birmingham
- Aigburth, Liverpool
- Notting Hill, London
- Clifton, Bristol
- Jesmond, Newcastle
- Hockley, Nottingham
- Harborne, Birmingham
- Oadby, Leicester
- Redland, Bristol
- Broomhill, Sheffield
- Chapel Allerton, Leeds
Useful links
Arthur (Dacorum), on 12/03/2008 at 00:56
Mabs (Hillingdon), on 19/02/2008 at 13:59
Any opinions on buying in Dubai ? Seems to be a booming place
MXM (Hillingdon), on 19/02/2008 at 13:59
Any opinions on buying property in Dubai ?
Robert (Salford), on 19/02/2008 at 11:00
Homefinder UK Ltd (Leeds), on 31/01/2008 at 10:36
lemkay wrote:
I'm looking to buy a property for the first time, but I'm finding it hard to decide how to go about it. I've been living in a rented accommodation in London with my family for over 10yrs. i have determined that this is the year or never. My fear is the rate housing market is going I keep asking myself if it's the right time. I'll appreciate any advise that can motivate me in this regard.
Buy Buy Buy, it's a buyers market. Because of the media attention to the property market at the moment with the interest rates, Northern Rock, the USA's sub prime market, house owners are extremely aware that there property which has risen in value by upto 3 times the purchase price you are now able as a 1st time buyer to negotiate aggressively as you are in a stong position. This is due to you having no chain (chains are collapsing daily), ready to move etc etc. If you want to make money out of property and get yourself on the house ladder there is never going to be a better time, just make sure that you buy the right house in the right area at the right price. Furher advice is available from www.mrhomefinder.co.uk
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Tameam (Hammersmith and Fulham), on 18/01/2008 at 11:45
we are in dilemma whether to let out our property
or to sell it as we plan to move out of london.
problem with seeling means that we leave the property empty and keep paying its mortgage waiting for it to sell which could take long time.
or to rented out which means we rentaaccomodation ourselves and not being able to buy our chosen property.
any advice from exprt
Simone (Epping Forest), on 17/01/2008 at 18:27
hi since you work for the council do you know about waiting times and how to get a council place epping forest council
zoe (Epping Forest), on 17/01/2008 at 18:24
hi, since you work for the council do you know anything about the housing list
A N Onymous (Enfield), on 14/01/2008 at 12:48
dilema deirdre wrote:
essex vs london?
work in london = bad quality of life
live in essex, its all rosey, but what about travel?
Hello Deidre
Working in London is not necessarily a bad thing, depending on your occupation. I currently work in Essex for Essex County Council and in the process of coming back to London to work.
Working in Essex, for me, has been a complete nightmare, but a very good education on how particularly White working class people allow themselves to be exploited by the status quo. Essex County Council has its staff driving all over the County ( I drove 25k miles last year - and much of the travel was unnecessary). Essex also is in the process of slashing spending because they have a history of mismanaging their finances; they are also wasting huge amounts of money - being conned by BT - who charge Essex annual network service costs 4 times the cost of purchasing a new computer. One guy was made redundant last year -and upon hearing the news killed himself by jumping off the top of his office building. The CEO tried to cover it up by saying that his family wanted the matter kept private. Following this the same CEO sent staff another email saying shortly after the event saying that the organisation must be 'ruthless and remorseless in pursuing its objectives for the coming year (read into this what you will, but it certainly raised many eyebrows with staff). Such language is very worrying and bizarrely, Essex won an Investors in People award for 2007!
I would like to discourage you from working in Essex if it's for Essex Council, but if you do, good luck.
A N Onymous
lemkay (Havering), on 12/01/2008 at 00:20
I'm looking to buy a property for the first time, but I'm finding it hard to decide how to go about it. I've been living in a rented accommodation in London with my family for over 10yrs. i have determined that this is the year or never. My fear is the rate housing market is going I keep asking myself if it's the right time. I'll appreciate any advise that can motivate me in this regard.
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