Buying In London

[housefinder]

I have recently moved to London and am looking to buy. Having looked at certain areas convenient to me I am deciding between a flat in swiss cottage close to the station on the hampstead side of finchley road, a larger property/house in the county roads of east finchley or a bigger flat in highgate. I am flexible with space but my priority would be to find a place which is likely to retain its value as much as possible in these volatile times should I decide to sell within 5 years and also bring in a good rental should I need to move within the 5 years and decide to keep it. Therefore a difficult one as I am trying to keep all angles covered. Which area to members think is the safest investment .

I am tempted by the more central location in Swiss cottage but if I should need more room in the future a house in East finchley may avoid me having to move again but will it retain its value?

Any help ,opinions and advice most welcome

[housefinder]

I have recently moved to London and am looking to buy. Having looked at certain areas convenient to me I am deciding between a flat in swiss cottage close to the station on the hampstead side of finchley road, a larger property/house in the county roads of east finchley or a bigger flat in highgate. I am flexible with space but my priority would be to find a place which is likely to retain its value as much as possible in these volatile times should I decide to sell within 5 years and also bring in a good rental should I need to move within the 5 years and decide to keep it. Therefore a difficult one as I am trying to keep all angles covered. Which area to members think is the safest investment .

I am tempted by the more central location in Swiss cottage but if I should need more room in the future a house in East finchley may avoid me having to move again but will it retain its value?

Any help ,opinions and advice most welcome

[gimble]

You should be aware that gross rental yields in London are near to an all time low at about 4.5%. Subtracting typical maintainance costs and agents fees from this and whatever money you are investing will be earning you about 3% or maybe less in rental income. Being a landlord will also cost you time. If you buy a flat and live in it you are facing numerous uncertainties regarding the property, particularly with the behavior of your neighbours and whether they are cooperative regarding the sorting of issues relating to the shared building. Alternatively you face uncertainty about the quality of the services provided by the building management if it is managed by a third party service provider. The sort of property you're talking about will be subject to at least 3% stamp duty. You will also incur some 2% fees in estate agent commission plus surveying and solicitors fees. The cost of moving into the property will therefore be at least £15,000. By most measures London property is overvalued, particularly given the uncertainties facing the financial services industries that are so important to the London economy. House prices in the capital increased by 250% in the decade up to 2007, and have recovered most of the falls that happened during 2008. The chances of significant capital gains in the next 5 years seem slim to me.

Buying property in London as an investment does not make sense. If you want a nice home to enjoy as your own and you particularly value the security of owning your own place, perhaps if you have a family, then of course buying makes total sense. If you're mainly looking to make money, though, you're taking a big risk in my opinion. Diversify your cash into other different types of assets instead. Don't take on a big mortgage unless you're sure that your income will be rising over the next few years. If you are only planning on living in the place for 5 years don't buy, rent. It's cheaper, it's more flexible, if you don't like the place you can move quickly at no cost.

[scrappycocco]

I travel all around London and I think that area is like gold. I'd buy but only if I had cash for the following reasons:

1) It's not as expensive as St Johns Wood, Hampstead and Primrose Hill.

2) It's walking distances from Lords and Regents Park.

3) It's walking distance from a tube station.

4) Loads of buses going anywhere you want around London.

5) Walking distance from cinema, library, theatre, leisure center, supermarkets, shops and quite good restaurants.

6) You probably wouldn't even need an agent, just stick an advert in gumtree and professionals will line up within minutes.

Disadvantages would be the noise, you definately need double glazing there and no mansion flats or houses for sale as I never see any agent's boards. There may be some ex council flats for sale but who wants to live in those.

I wish I could have bought a flat there in the 1990s when they were affordable.

[STRLondon]

If you just recently moved to London I would rent somewhere till you find a place you really like. There are so many choices so it can be hard to choose.

Chances are you will want to move in a few years time as you will find somewhere more suited to you. Finchley Road was a pretty good to visit because of the o2 centre, I had family in Hampstead and Belsize Park and I lived in Golders Green. The weatherspoons at the O2 centre is really good, the Cinema there is pretty expensive though - I think it was about £12.50 a ticket last i went. Highgate is lovely, but not on a good tube route from where I lived in Golders Green.

The Northern Line is an execellant tube line, but Finchley Road isnt attached to it, but you do have the option of the overground there too. Buses get rammed on Lords cricket days so although its not a short walk back up to Swiss Cottage, I found myself walking up that way to try get on a bus, most buses wont stop when they get to Lords because they are already full as people fan out to try get on buses after a match.

North West London is very very expensive, I lived less than a mile away from Bishops Avenue, the most expensive road in the UK. Top selling house on that road went for £50M. If you look at prices in places like Belsize Park you will see prices rose about 50% in a year period between about 2006-2007 and are still very very high.

Also if your thinking about Swiss Cottage, have a look at West Hampstead, really really nice and not very far away.

Hope that helps

Edited February 5, 2010 by STRLondon