Thursday, Jan 29, 2015

The dangers of pricing London as if it's a landlocked peninsula like Manhattan, Hong Kong etc.

FT: Londkn faces surfeit of expensive new homes

Most of the new homes being built are two-bedroom apartments in high-rise towers and many are being sold to “unsophisticated” foreign investors, said Charlie Ellingworth, the founder of Property Vision.
“It is unlikely that investors are going to see the sort of yields that they have been led to expect,” Mr Ellingworth warned. “The pool of buyers may extend to the whole of China, but the pool of tenants is pretty static.”
The owner of a £1m, two-bed flat would need to charge £30,000 to £40,000 a year in rent in order to make a gross return on their money of 3 to 4 per cent, Mr Ellingworth said. “There are not many people in London who can afford that.”

Posted by sneaker @ 11:44 AM (2284 views)
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2 Comments

1. cornishman said...

Maybe they won't need tenants.

The way this whole thing has played out, I wouldn't be surprised if capital gain of much more than 3 to 4 % is on the cards. Especially with completion of Crossrail 1 and 2 - and not forgetting the Enfield by-pass, of course. And, negative interest rates will mean that they will make money there as well, so I'm led to believe.

What could go wrong?

Thursday, January 29, 2015 12:37PM Report Comment
 

2. debtserf said...

Do you remember the good old days before the ghost town?
We danced and sang, and the music played in a de boomtown
This town, is coming like a ghost town

Thursday, January 29, 2015 03:56PM Report Comment
 

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