Brett Alegre-Wood at YPC Group on where to buy your next investment property in the British capital
Tell us about YPC – how are they different from other property agents?
Our clients don’t have the time to worry about all the small things so we make the process as effortless as possible.We do everything for them from researching areas, vetting developers/developments, due diligence, preparing detailed cash flows, finance and solicitors. Everything, basically, including carpets, flooring and furniture, right down to toilet roll holders and mirrors. We then find a tenant and fully manage the property, including paying bills.The whole thing is designed to be ‘Set and Forget’ with minimal input and as few people as possible to deal with.
You specialise in London and UK property. How is the market looking currently – is it a good time to buy?
The market is great, the property downturn ended in early 2009 and the London market gets stronger and stronger. With government initiatives kicking in, local buyers have rebounded and supply isn’t keeping up with demand. So it’s definitely the time to jump in if you have been sitting on the fence. I predict good growth across London for at least the next three to five years with some easing if prices keep at the rate they currently are without wages also increasing.
Are there any specific parts of London you’d recommend – or any other UK cities?
I hold free monthly seminars in Singapore, Hong Kong and soon Southern China about the current London Property Hotspots. Right now I love Zones one and two in East London, and Zones two, three and four in South East London. I am not saying everywhere in these areas of course, but we’re seeing solid growth across these pockets. Other UK cities are coming back but you end up having to buy cash, besides London is just far too good an opportunity to ignore right now.
And any specific properties in London?
It depends on the market you want to enter into. In Zone one – I love Berkeley Group’s 375 Kensington High St, it’s part of a larger four-site scheme over the next 10 years.
What sort of returns can investors expect?
Expect very little negotiation on the price from agents now, they are selling at full price plus plus. Capital growth will run between 5-10% per annum with a number of 15% areas in Zones one, two and three and working out to Zone four. Some people are concerned that the market has already risen too far but that simply isn’t the case. Finance is still hard locally, smaller developers cannot get funding and the local market is still a little arm’s length but the signs are promising.
You talk a lot about properties having good solid fundamentals – can you explain this in more detail?
I find the old ‘location, location’ adage outdated and used more for sales than for giving a real understanding of the factors affecting price and rentability. I say ‘Good Solid Fundamentals’ meaning to buy near shops, schools,transport links, major employers, major investment areas (or regeneration as we call it in the UK.) You can renovate a property but you cannot regenerate the area it resides in; so buy the fundamentals upfront and benefit thereafter.
What mistakes do you see investors making when buying property?
Jumping in because of the Zone rather than the local fundamentals, belief that the list price set will value up when it is completed and therefore not researching, and not asking detailed questions about the property and surrounding area. I had a guy who bought 7th floor Canary Wharf views but didn’t ask what the ‘existing development’ was across the road. It was a 15-storey council block which totally took his view. Finally, buying from unknown developers with no track record just because they could afford to pay for an overseas exhibition.
Are there any pitfalls for foreigners buying property in the UK?
I think mainly the fact that you aren’t living there so you need to hand over control of the management of the property; so find someone you can trust and build a good relationship so when things go wrong they will at least be honest with you and fix them.A dual presence in London and Hong Kong helps to make sure things go smoothly.
If you are thinking of investing in London and would like a direct introduction to Brett at YPC, contact LOFT’s team here.