Buying to let - surrounding London areas

Ironic Namesake · 4 Mar 2013 at 06:41

I know there was a similar topic recently but a bit of a different situation - OP was looking to buy properties with a couple of friends in areas of Stoke etc.

Anyway, as an investment I've been doing some research into buying some small properties - 1 bed flats, within commuting distance (ie. 30 mins or so train journey to London Bridge / similar stations) where prices are more affordable (£100-£140k) my aim is not necessarily to make a hefty profit on rental each year but to own some property in 20 years time when the mortgages are paid off to assist with buying a place for myself, or maybe to keep for retirement income.

I'm aware of the BTL mortgage rates/agency fees/possible issues with tenants/unpaid rent etc.

Is there anything else I should be considering? (Never bought a property before

)

Ironic Namesake · 4 Mar 2013 at 07:10

maccapacca said:
Paying a mortgage off is effectively profit therefore treated as a taxable income.

Not a problem just make sure your calculations include this

I'm currently living abroad so I don't have any income in the UK - would this be taxed at the standard rate? (ie first £8105 tax free for this tax year)

Ironic Namesake · 4 Mar 2013 at 07:49

platypus said:
http://www.hmrc.gov.uk/international/nr-landlords.htm.

Thanks, will have a read through this

Ironic Namesake · 4 Mar 2013 at 14:45

Looks like I may be eligible to receive rent tax free which would help a bit

Although it seems that the fees for BTL mortgages seem to be a fair bit higher than standard mortgages - HSBC want £1999 Booking fee :eek:

, with interest rate tracker of 2.99% above base rate

Ironic Namesake · 4 Mar 2013 at 15:12

Vanilla said:
Also looking to do this when I return to the UK in a year.....

Looking at around 4/5 properties, two bedders near the tube lines, west London.

Read up on the tax side, ability to write of 10% to wear and tear, tax discount on mortgage interest, etc.

I want to go a bit further out - West London is also quite expensive, especially for 4-5 of them :eek:

Ironic Namesake · 4 Mar 2013 at 15:24

bloodiedathame said:
Damn, I need a £140k house for my wife and child within 30 mins of London. Bloody house theif.

Don't worry I'm only looking at flats at the moment not houses

Ironic Namesake · 5 Mar 2013 at 07:27

Hamish said:
I have a letted property in west london and live abroad.
As has already been mentioned before you can write off 10% wear & tear, and register yourself as a non-resident landlord. you can also write off home improvements against tax.

Estate agents charge a fortune for management fees, think I'm paying 12% fully managed for not much, if you have a mate near by I'd see if you can bung him 50 quid per issue to look after the tenants....

Yeah I spoke with a couple of estate agents - 12-13% seems to be the going rate for management fees , although apparently this includes insurance for non-paying tenants and any legal costs that you may occur if rent isn't paid and tenants need to be evicted.

I'm still quite unsure though - originally I was looking at flats further out but within commutable distance, these are anything up to around £120K or so, in this case I'd like maybe 2-3 of them. But I don't know these areas at all, and not sure if it's a wise idea if I'm abroad the whole time.

The other option I looked at is a single flat or possibly 2 in SW London in an area which I know well but is far more expensive (ie £220-250K for a 1 bed flat) but would still yield 5+% after management fees etc.

Also a bit concerned about interest rates increasing after 5+ years.

Lots of thinking / researching to do