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Investor keeps the faith for buy-to-let in London

Posted 30 January 2017 by Ben Salisbury

A Brunel University lecturer who has bought a Redrow Westbourne Place apartment in Maida Vale thinks London is still a great place for buy-to-let investors

Going through a period of change in recent months, landlords have faced a number of hurdles, from additional stamp duty charges and the eventual abolishment of tax relief on buy-to-let mortgage payments.

However, HMRC figures at the end of 2016 showed a significant boost in confidence, reporting that over a quarter of properties snapped up by buyers were buy-to-let investments or a second home.

Zhe Zhang, a lecturer at Brunel University, is one such investor, recently purchasing a two bedroom buy-to-let apartment at Redrow’s development Westbourne Place in Maida Vale, a stunning conversion of a Grade II-listed Victorian police station.

Despite the reported lower yields on some areas in the capital, Zhe, who has a small but growing portfolio in London, is convinced he has made a sound investment and has real faith in the London market.

Originating from China, Zhe has lived with his wife in Uxbridge, West London, for around eight years. He comments: “I love London; I’ve been living here for long enough to feel I know it really well. It really is unique –I don’t think you’ll find another city like it anywhere else in the world.

“I have great confidence in the property market here – especially compared to mainland China, not to mention Hong Kong. For the long term, property is definitely still a good investment – even if prices do potentially dip temporarily next year. In my opinion, bricks and mortar are a much better investment than stocks and shares which are too unstable. If you do your research, I believe the property market is more predictable.

“In China you can only buy a property with leasehold for 70 years maximum, whereas here it’s 125 years. You can’t buy a ‘ready to move into’ apartment either, one with fixtures and fittings such as flooring, electrical appliances included –so it would take you months to make a property rentable. With the higher end developers in London like Redrow, the homes are finished to a high specification.

“When the news of the new stamp duty fees came out it was a bit of a shock. A lot of my friends have pulled out of purchases, but I think in the long term as house prices rise, the extra 3% will be cancelled out and it won’t seem so relevant."

Zhe paid £730,000 for his apartment with a 10% deposit and expects the rental yield to reach around 3.5-4%, which he says isn’t bad for London. He expects to rent it out to young professionals or a small family.

“The thing I really love about this property is that it’s a conversion so it has great history, lots of character and it’s not just a clinical apartment block. The building used to be a police station which is pretty cool – I love the ceiling heights, especially on the ground floor, they make a really good impression when you walk in and the building retains lots of the original features.

“I always check that the refurbishment is done to a high standard – the developer is quite important in that sense. Redrow is a big name in the UK market and they have a good reputation for quality homes.Low maintenance and amenities like a communal garden area all add to the benefits of being in a new development.

“I did my research before I bought and viewed a number of properties from other developers with lots of different specifications and character but I liked the feel of this one. It immediately felt like home. I think it’s important when buying a buy-to-let property to consider whether you would want to live there yourself.

“It’s a good location with the tube just 5 minutes’ walk away. Portobello Market, Maida Vale and all their amenities are really close which is great!  Price, of course, was a factor - it’s much cheaper in Maida Vale than neighbouring Notting Hill.

The development enjoys easy access to central London, with Westbourne Park and Royal Oak London Underground being a short distance from the development. The stations provide direct links to Baker Street (10 minutes), King’s Cross (18 minutes), Euston Square (15 minutes) and Liverpool Street (27 minutes).

The apartments are priced from £695,000 - for further information, please call 0203 538 3791 or visit: www.westbourne-place.co.uk

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