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Buying a House and Investing in UK

Discussion in 'Money Matters' started by knightstrike, Jan 15, 2018.

  1. knightstrike
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    knightstrike Well-Known Member

    Hi guys, it's been a long time since I've posted here. Hope you are all doing good.

    So I'll be able to purchase my first home soon and will have enough money for investment as well. I'm doing my own research but also want some tips and opinions from prople who have done it before.

    So I'm based in London, and I'm thinking of purchasing a house around North London or East London, though I'm also open elsewhere as long as the price and journey to my work will be good (Central London).

    My range is 300k to 350k. I want a three to four bedroom house so I could rent out the other rooms to pay for expenses and extra income. I also want a backyard or a garden so I could renovate it and make a home gym. So what will be a good location? Also are property agents good to talk to?

    As for my investing preference, I am a low to medium-risk taker. I have about a 100k to invest. So what will be good in today's economy? Bonds, stocks, P2P, etc.?

    So any words of wisdom from you gents?
    Last edited: Jan 15, 2018
  2. Maley
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    Maley Well-Known Member

    Thats good to know.

    Im not familiar with london house prices but i guess that price is unrealistic with the requirments that you have. My brother in law is buying a 2bed flat and its about 350k. So a real house with garden and more than 2bed would be expensive (although it depends on the area).

    £100k is a lot of money to invest. You might want to check with a financial advisor to get a personalized advise- depending on your long term goal, risk appetite etc.

    Are you considering investing a bit of it in PH- Hedging your bet between 2 countries? PH growth rate is projected to be more than 7% for the next 10 yrs- thats 3x faster than UK right now (My UITF in ph grew by 15% last year.)
  3. bigmac
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    bigmac Well-Known Member Trusted Member

    hello knight--good to see you back on here. i watch tv programmes about buying property. i think your 300-350K ££ budget will be ok---for the deposit ! in London.

    as for investments--well interest rates have been soo low for years now--which is good news if you have a mortgage. i get 1% in a savings a/c with nationwide building society.
  4. knightstrike
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    knightstrike Well-Known Member

    I saw some properties online in East Ham, Plaistow and Edgeware at around 300 to 350k. Those are in East and North London. I'm open to living outside as well but it has to be accessible. Maybe Essex or Kent?

    There were some cheap properties in Barking and Dagenham and also some in Maidstone. Hmmm...

    I was a in recruitment so I distrust someone in a similar line of job. Hahaha. I think of them as salesmen to the core and only thinking of how to make their cut regardless of their client's portfolio gains.

    But I'm open-minded and I'm torn between doing it my own or through them, so what is your opinion of them? Have you tried it or know someone who did?

    I'm out of touch with the Philippines.

    But are Philippines stocks really good? Telecoms seems to be hot ones. How are you doing so far?
    Last edited: Jan 15, 2018
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  5. knightstrike
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    knightstrike Well-Known Member

    Oh and what if I don't invest the 100k and instead purchase another house through mortgage? Too risky?

    What will you gents do in my situation?
  6. bigmac
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    bigmac Well-Known Member Trusted Member

    spend it.
  7. knightstrike
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    knightstrike Well-Known Member

    I'm tempted to actually blow it all up in Netherlands, Thailand or Brazil but I don't want to end up broke again. I never want to experience those days again. :lol:
  8. Bootsonground
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    Bootsonground Well-Known Member

    My advice is wait.
    The prices in London and in fact most of the South east have been hugely over blown since 2004.. The bubble continued to grow because of Chinese and arab investors that bought up huge blocks of London,artificially propping up prices .. The way the Government are handling Brexit means there may even be another referendum after Parliament and the Lords block any deal agreed with the E.U.. If foreign investors pull out because of a lack of confidence then the whole market could drop again as they did last year..
    Much better value and growth prospects in the R.P IMO.

    https://www.theguardian.com/busines...n-london-and-south-east-in-2018-say-surveyors
    Last edited: Jan 16, 2018
    • Informative Informative x 1
  9. Drunken Max
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    Drunken Max Well-Known Member Trusted Member

    My mum has a Financial advisor and is getting about 14% per annum net at level 6-7 risks. Medium to high
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  10. knightstrike
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    knightstrike Well-Known Member

    I need a place of my own Boots. I don't want to keep paying rent to someone else. But yeah that article is very informative and hopefully it comes true.

    Go Theresa! Go and screw everything up please.:lol:

    As for investments, alright I'll check what is out there in PH as well.

    Your mum is more YOLO than me. :D
  11. Maharg
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    Maharg Well-Known Member Trusted Member

    If you google "house prices drop", all the headlines that come up are about house prices falling in London.

    I don't think investing in a second property is the sound investment it used to be.

    House prices are far too high anyway, and hopefully they will drop dramatically soon so that people can actually afford somewhere to live, which is what house prices should be about.
    • Agree Agree x 1
  12. knightstrike
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    knightstrike Well-Known Member

    I just googled it and this is going to be a buyer's market.

    Hopefully it drops more.
  13. oss
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    oss Not Here

    The rationale of owning vs rent is predicated on the notion that the property will in the long term continue to rise in value, that was true 30 years ago and those who got on the ladder back then generally have seen quite dramatic rises in the paper value of their property. However today it is quite clear that property prices in the South specifically London are way beyond affordability for the average family, if you are averse to risk what's the point in sinking cast amounts of cash into a house and then paying huge possibly unsustainable mortgage payments each month only to have the paper value drop by 50% when the crunch comes.

    This has happened before, loads of people got caught in negative equity during the last major property bubble in the 1990's, the thing is you need to look at the average joint salary of a married couple and multiply that by three then look at what they could reasonably afford on that multiplier.

    2016/2017 UK average salary was 27,000 a year so being optimistic call that 54,000 x 3 = 162,000 then ask yourself what you can get for that in London, I think we all know the answer.

    A house is a home and should be purchased on that basis, more so these days as it may or may not be an investment over the long term.

    For people to make the kind of profits that were made in the last 30 years there is going to have to be a very big crunch combined with large amounts of inflation in order to get things back to some kind of balance, the reality is that property is a game of chicken in the UK where he who sells at exactly the right time wins, most people can't sell when the crunch comes and they are the poor slobs that have paid for the profits of those who got out of the market at the right time.

    I agree with Boots on this one.

    If you were looking at buying a second property as a buy to let landlord then there are plenty of parts of the UK where you can pick up properties for peanuts, 30,000 for a reasonable flat that could return £4000 a year or more in rent the only caveat being that taxation of buy to let profits is no longer as favourable as it was.

    There is nothing that says that a landlord has to own his own home, London offers you the opportunity of high earnings at the expense of having to pay rent for a roof over your head but that does not mean that you can't invest in property elsewhere in the UK at the same time as working in London.

    If it were me with that kind of cash at your age I would be putting it into a pension particularly if I was risk averse.
    • Agree Agree x 2
  14. Drunken Max
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    Drunken Max Well-Known Member Trusted Member

    I agree with above.

    My mate works in the property letting market and the best returns are where properties are cheaper. "Vanity buys" as he puts it do not give the same return. Lots of properties in say the Northwest of England. For £300k you could buy two properties and get about £700 a month from both with decent tenants.
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  15. bigmac
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    bigmac Well-Known Member Trusted Member

    i am mildly curious about just what you do, @knightstrike to earn the sort of money in such a short time that gives you £300k to go house hunting and £100k to play with.

    unless --of course--its just wishful thinking.
  16. oss
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    oss Not Here

    He sells people like me :) software devs.

    I'm actually in the wrong game, I know more about the requirements of the buyers that Andrew sells to than the majority of folk working in his game, but I could just never work in that kind of sales environment.

    Recruitment agents make commission on every placement be it a contractor or a permie, place enough of them and the commission adds up.

    As an example we had to pay £8K commission for a lad we brought on full time at a salary of around £40K about 4 years ago.

    Agency charges on a contractors daily rate will range from 10% to 15% a typical top end contractor will be on £300 to £500 a day based on experience, in London it's at the upper end of that range and some skills can probably still see some contractors pulling in £1000 a day.
    Last edited: Jan 16, 2018
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  17. knightstrike
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    knightstrike Well-Known Member

    I work for a oil/gas company now.

    Though I managed to gain most of the money for this by selling several lands in the PH.

    Well my partner was the one selling and I was the one doing the financing and had connections.

    I left it two months ago. Money was good and everything but I didn't have much work-life balance.

    But yeah, the money in recruitment especially IT is quite good. I don't have much technical knowledge in ERPs but I can get by with functional.
  18. Drunken Max
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    Drunken Max Well-Known Member Trusted Member

    I work in Oil and Gas too, as a service product supplier. Its a fun industry
  19. knightstrike
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    knightstrike Well-Known Member

    It's quite funny how my colleagues especially the old timers keeps on reminiscing about the 'Golden Age or the Good Old Times.'

    'Back in the day, you can test drive a Ferrari as long as you have a license and you are an employee.'

    'Back in the day, lunch was free and you can get concessions for your travel.'

    'Oh back in the Golden Age... blah, blah...'

    :lol:

    But yeah, I can feel that things are now what it used to, even though I wasn't working in the industry before.

    I've been moving around a lot, so I feel I want a place of my own now.

    The house I'm living in now has too much drama. And while I can move out, what's not to say that it won't be the same situation elsewhere?

    There is also an option of me renting a flat, but then I'll lose out on capital/investment.

    If I invest far away from London, I won't be able to live in those places and will have to rent it out.

    I haven't really made up my mind yet that's why I'm trying to do research and asking you guys.

    But true, when I reach your ages (the age of wisdom... :lol:) I probably won't retire in London.
    Too chaotic.
    Last edited: Jan 16, 2018
  20. Maley
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    Maley Well-Known Member

    Im not actively trading so its not a real view but its been doing really well. Been growing for 12-15% for the past 2 yrs.

    I understand your hesitation on personal advisor but you do get a good one. There ones whose fee is based on the ‘gains’ of your fund, then you would think that they will have the same goal or maximizing that gain. But i would still think they are the best one to give you a best advise. Its usually free and if you dont like the deal or the advisor is giving a weird vibe then walk away.

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