London is and will remain London, the capital of the world, some would say! Its language, its economic and cultural dynamism, its universities, its 4 airports and its Eurostar station, London is a bustling crossroads, a city that attracts those who succeed, those who want to succeed and those who have succeeded. The political and security environment is stable. The legal and fiscal context is favourable with laws that favour owners. In addition, the many parks and green spaces make it a truly pleasant city to live in. Finally, the real estate market, even though it has been stable for the past 2 years, has grown by an average of 10% per year in value over the past 20 years. It is robust because the housing stock is dramatically below needs. There is also the very favourable exchange rate if you have funds in euros or dollars. So it is more than likely that prices will start rising again soon, the question is when? As you will see, there are many reasons to buy a flat in London.
How do I invest in a London apartment?
The “Buy-to-Let” allows you to access the loan and repay yourself in part or in full with the rents you receive. You will thus be able to take advantage of a very dynamic London property market and a strong capital gain on resale, this is called the “capital gain” (10% per year on average from 2000 to 2015). In England, buy-to-let is governed by special legal provisions.
1) Know what your objective is:
Resell in a few years and bet on the increase in the price of your property or pay for the property over a certain number of years (10, 20, 25..) and then enjoy monthly pensions (retirement supplement)?
Would you like to keep the option to live there one day or make it available to your children later?
This objective will be a determining factor in the choice of the property (good yield versus the potential increase in the value of the property).
2) Knowledge of the market is essential:
French Touch Properties is there to advise you! Neighbourhood on the rise? New or old property? In need of restoration? Possibility of extensions? Garden or not ? Freehold or leasehold?
3) Choose a promising area :
In which area of London? This does not necessarily mean the most expensive or the cheapest, but a place where people want to live, for various reasons: accessibility, good schools nearby, lively neighbourhood, shops, etc…
4) The borrowing rate :
We know the best “mortgage brokers” whose job is to negotiate with the banks the best rate for you. The higher the personal contribution, the better the rate. Please note: the rate for a buy-to-let is higher than for a purchase with a view to living in the property yourself. (even if, at the moment, they are at very interesting rates, historically low, will this last).
5) Think about your target tenant to choose the right property :
For a family: Storage is important.
For students: easy care, comfortable without the need for luxury
For young professionals: modern style and easy to store
6) Possibility of (non-compulsory) insurance covering non-payment of rent :
The ” rent guarantee insurance “. Low-cost and reassuring protection at the same time!
7) Don’t forget to keep cash for the maintenance of the property (ex: change the boiler etc…).
8) Choose to manage the rental yourself, or go through an agency for an agency fee.
Note that French Touch Properties can also find you a tenant.