We’ve deliberately left out of this analysis the impact of financing the purchase but plainly the greater the amount financed, as opposed to own-funds, the lower the net yield.
London, UK (PRWEB) December 21, 2012
Investors’ portal iNVEZZ has recently released a comprehensive analysis of the buy-to-let London property market and the investment opportunities that it holds. The author of the publication, Frank Quin, starts his editorial with a note clarifying the purpose and analytical direction of the piece. He writes: “In this piece, we delve into the London housing market on the footing that we’re a buy-to-let investor with a quarter of a million pounds at our disposal.” In the introduction, Quin also raises the central question around which his further analysis revolves: “What can we buy in London for £250,000 and what could we expect to gain from it?”
Moving on, the author of the iNVEZZ editorial provides the portal’s readers with some recent information in regards to London residential property prices. He cites a tool published by the BBC last month, which covers London housing prices for the third quarter of the year, using data supplied by the Land Registry of England and Wales. According to these statistics, the average price for a home in Greater London – all property types – is well above the amount of £250,000, the stake Quin considers as typical for a London buy-to-let property investment. Yet, he remarks that this average has actually been strongly influenced by housing prices at the top of the scale and that “our attention is more focused on the middle of the road – while there’s no standard definition of the term, ‘buy to let’ connotes investment by the hard-working middle class rather than Arabian oil.”
Quin narrows readers’ attention to one particular London borough whose average price for housing in the cited survey period was closest to the Greater London average – Barnet. In a further effort to illustrate an example relevant to the level of capital investment in question, Quin focuses on a particular type of property fitting the £250,000 bracket – flats. Giving a comprehensive example of a Barnet flat as a buy-to-let investment, the author of the analysis cites exact purchase and rent figures. He outlines: “we suggest that a two-bedroom flat in an attractive part of Barnet with a market value of £250,000 is more likely than not to attract quality tenants either side of £300 per week.”
Quin also looks at how this suggested rent would translate as a return on the quarter of a million pounds invested. “In other words, the yield,” he writes. After calculating what could be expected as the gross yield, Quin highlights the factors that will affect the actual net return that the investor will hope to receive on their investment.
Following his detailed look on return opportunities, Quin also briefly covers mortgage finance and the reason why he excluded lending from his showcase: “We’ve deliberately left out of this analysis the impact of financing the purchase but plainly the greater the amount financed, as opposed to own-funds, the lower the net yield.”
The author of iNVEZZ new editorial concludes his analysis on a moderate note, saying that “these are indeed uncertain times” for real estate, yet investment in the buy-to-let London property market “is probably the next best thing” to an investment being “safe as houses”.
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