Would-be property investors are better off heading for the suburbs
Buy-to-lets strategy can bring you a profit even in the turbulent property market. This despite the fact that buy-to-let may prove to be the first big casualty if the housing market happens to go belly up this year. Of course, investment buyers will first have to see where to locate properties at these prices.
According to property market analysts, investors should avoid newbuilds in city centres and move to secondary areas to buy secondhand albeit good quality properties - flats constructed a few years ago, older properties or conversions. Thus, they won’t be required to pay a new home premium and will avoid competing in a location that is over-supplied with flats to let, property experts suggest.
They point out that most prime city centres are having too many flats to rent. According to estate agency Knight Frank, nearly 87 per cent of homes in the central Leeds area are one and two-bedroom flats, with 40% privately rented. Roughly 70% of new homes in the central Manchester area since the beginning of the new millennium have sold to landlords whereas in Sheffield, the figure stands at 65% since 2002. Trends and statistics from Liverpool and Newcastle are similar.
Situation of an over-supply is not likely to be corrected in a hurry at least in the near future. So, each month many buy-to-let investors need to top up their investment without the prospect of significant capital gains, note estate agents.
Taking all the above factors into account, property market analysts contend that would-be investors are better off heading for the suburbs.