Tuesday, May 08, 2007
A taste of whats to come from t'north
Daily Telegraph: New build is worst buy-to-let investment, experts warn
New build property is the worst buy-to-let investment in the current financial climate, industry experts have warned.
Posted by dobber @ 06:07 PM (158 views) Add Comment
4 Comments
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1. enuii said...
Slightly obvious this one as I live in Warrington, a town bursting at the seams with crappy, overpriced 1/2 bedroom new-build apartments starting at £109K. If you look at the rental income of less than £500pcm it's not rocket science to work out that they are the worst property deal you could currently enter into. Many of the blocks sit predominantly empty and one developer of 'luxury, exclusive, designer' apartments has just sold 14 on to the DHSS. He's not bothered but I'm sure some of the other people in the block who have bought their flats will be less than amused at the prospect.
IMHO the proliferation of this type of development will be seen in 10-15 years time in the same disastrous light as the 1960's high-rise developments were in the 1980's..
2. Scott said...
Next to where I work in North Acton there is a block of luxury flats completed last year. Most are empty. The rent is £850 per month but most are empty. Right on the central line and most are empty. And if they don't want them in London, why would people in places like Warrington have them? By this, I am only referring to job prospects in the quieter areas of the north west. I actually think Warrington is a nice place.
3. tipping point said...
What we are seeing now is the product of brainless BTL buying 2 or more years ago. Their 'belief in what ever the estate agent tells them about rental income' approach to buying was the fuel for the flat building idiocy that's going on now. If built in the right area the fall in value will probably only be 15% due to reduced rental income. However if built in large estates on semi green field sites then expect your executive flat to become part of a social housing estate within 5 to 10 years and the value to depreciate by 50% plus.
4. Paulos said...
@enuii: "IMHO the proliferation of this type of development will be seen in 10-15 years time in the same disastrous light as the 1960's high-rise developments were in the 1980's.."
My opinion exactly! I'm renting on such an estate at the moment, and the lack of care and pride people have in the place is astonishing. The build quality is very poor as well.
When I moved in 2 years ago, a 2 bed flat was £600 per month. A year later that rose to £700. I'm looking to renew my contact in September, and the rents have now fallen to £575. Some investment!