majortinkle Posted October 11, 2011 Report Share Posted October 11, 2011 I am looking at buying a new build apartment near the olympics site as a first investment property and there are several to choose from in the 1 and 2 bedroom range at pretty similar prices, £230k - £250k. I have always assumed that 2 bed places would be easier to rent out in London as the relatively high rents could be shared by more than one tenant, but I just want to see whether experienced landords agree with this assumption or think that 1 bed places are just as good before i splash the cash. Are there particular factors that would make a 1 bed better than a 2 bed - it being a penthouse for example. Many thanks Link to comment Share on other sites More sharing options...
Richlist Posted October 11, 2011 Report Share Posted October 11, 2011 What is it about buying a new build property near the olymics site that attracts you ? Could it be the possibility of higher rents for a relatively short period during the 2012 olympics ? What sort of rental market is likely to exist near the olympics site AFTER the olympics ? I'm not at all convinced there will be much of a rental market in that part of east London. If I'm right then it won't matter if its got one or two bedrooms. Buy in a market that has proven history......there are lots of London areas that have good rental history....spending £230K-£250K is far to much to speculate. Link to comment Share on other sites More sharing options...
Jas@FiveTrees Posted October 11, 2011 Report Share Posted October 11, 2011 An investment in that range in London does open up a lot of potential investment areas, which may (?) be better value. There is obviously a lot of hype in east London at the moment especially with the opening of the Westfield Stratford shopping centre and infrasture development as well (Crossrail). Do you know what current one / two bedroom properties go for and what the respective rents are in that area? Link to comment Share on other sites More sharing options...
chickpea Posted October 11, 2011 Report Share Posted October 11, 2011 Just to say - We came very close to buying a new-build apartment (one-bed), but when we met a mortgage advisor it became clear that the choice of BTL mortgages on offer for such a property was considerably less than other types of property - this is because, hisotrically, new-build flats lose value quicker than any other property and are more limited in their potential to let (not appealing to families, the elderly etc). We decided against buying the apartment because that, along with the cost of ground rent and maintenance fees made it financially unsound. Link to comment Share on other sites More sharing options...
majortinkle Posted October 11, 2011 Author Report Share Posted October 11, 2011 I already live near the olympic site so I suppose I'm sticking to an area I know albeit the other side of the site. While I'm aware of the short term high rents, although I think they won't be as high as people currently think, that's not my motivation, I guess I just really believe in the regeneration plan. I can see having lived through it how far that Hackney has come over the last 5 years or so and how the gentrification has crossed pretty much West to East which if it continued would have Stratford as the next in line and has the small matter of the Olympics giving it a nudge. I'm realistic in the near term because there's going to be a shed load of new builds being completed over the next few years, but I look at the transport links (which is the only thing that East London lacked - it was why I was reluctant to move here initially), and as long as they get the waterfront mix right it's going to be a really desirable place to live for a very long time. So desirable and close to Canary Wharf and the City sounds worth a punt to me. It's a good point on the mortgage front - it's not mentioned on their headline small print but I remember reading about that being an issue a few years back in Leeds and Manchester, I'll have to check that out, but I didn't think that it had been a factor in London - although given it was caused by saturation of the market I can see the risk for the future, but can't help thinking that London can cope with these without hitting that point. Also looking at what's available in the area there doesn't seem to be that big a mark up for new builds against conversions - now that could be that they're all overvalued or it could be that the developers realise that there's a lot of choice and that they can't inflate the prices in the current market. If you go still further east then there's definitely a marked drop off in the prices but then the transport links aren't as good and you're obviously not as central. I know the local estate agents say the area doesn't currently attract families for rental so while I agree that neither do new build flats if you want to invest in this area then I don't think that you're missing out by going for a flat. I guess I just think back to when I was a young professional(ish) and given the option between a victorian conversion and a purpose built flat with gyms etc I'd have gone for a new build - rental, this is, not to buy admittedly. I also think back to then and I wouldn't have been able to afford the rent on a one bed by myself but could have afforded half on a 2 bed - I guess that's why I think it's a better option. The flats I'm looking at would have been perfect for me 10 years ago and I guess I'm banking on the current crop of young professionals thinking the same. I really appreciate hearing the counter argument though so please ring some alarm bells if you think I'm deluded! Many thanks for your help. Link to comment Share on other sites More sharing options...
Mortitia Posted October 13, 2011 Report Share Posted October 13, 2011 I think one thing you may have missed here Major is management charges on blocks of flats. Do you get a share of the freehold with your proposed purchase? If not what are the charges and who runs the company and what will be their cut? I would do some serious reading of the lease - then buy something with a share of the freehold. Not so trendy but more controllable. All very nice having a gym, concierge, gardens etc. but who pays and what? What happens if lessors fail to pay and what if the upkeep is not to a good standard? A good investment or a ghetto waiting to happen? Mortitia Link to comment Share on other sites More sharing options...
Jas@FiveTrees Posted October 13, 2011 Report Share Posted October 13, 2011 'Caveat Emptor' Its not a case of being deluded, more of doing the necessary homework before parting with hard earned cash. The good thing about forums such as these as they give food for thought and make us think about things that we may not have initially thought about. Best of luck with your hunting ! Link to comment Share on other sites More sharing options...
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