It will come as little surprise to anyone who knows the area to find that the Stratford area of East London is now a hot-spot for buy-to-let properties. Rental yields currently top 7% in Stratford and the neighbouring areas of East Ham and Plaistow making them some of the highest money-spinning areas in Greater London, according to a recent survey.
With more than half of Londoners now renting rather than buying, the market for buy-to-let properties looks set to grow. And Stratford is certainly a good area to look at. In recent years it has shaken off its old run-down image – the up-market Westfield Stratford City shopping centre now stands where steam locomotives built back in the day.
The 2012 Olympics have brought extensive regeneration to the Stratford area. Apart from the Olympic Park there have been many new residential developments offering excellent prospects for the buyer wanting to let. But there is a wide choice of older homes in the area which can also be worth looking at.
Stratford is popular with commuters – and a good choice for BTL property
The high costs of commuting mean that more people are now choosing to live nearer their work. So Stratford’s excellent transport links make it a handy place to get to and from – it is well-placed for anyone wanting to commute to the City or West End, while Docklands is almost on the doorstep.
When looking for a buy-to-let property it is worth doing some homework before buying. At present several lenders are offering attractive mortgage deals, so buyers should shop around for the best package.
It is preferable to have a sizeable cash deposit available – although some lenders have reduced the amount of the deposit they require buyers to find, it is likely that they will impose tighter restrictions on the type of property they will lend on.
Apart from the obvious matters of price and location, it is essential to work out the likely rental income. Buying in a popular area like Stratford should make it easier to find tenants and lead to fewer periods when the property is empty and not producing an income. But it should never be assumed that rental income will be continuous, and the possibility of void periods needs to be taken into account.
For those new to the market, buyers will also need to be aware of the costs involved in letting a property, such as letting agents’ fees and management expenses.
Choose a Conveyancing Solicitor familiar with BTL purchases
Once you have found a property to buy you will need to appoint a Conveyancing Solicitor to carry out the legal work involved. You will want someone who can complete the Conveyancing promptly and efficiently, so it is better to look around and compare quotes before you make an offer on a property.
While it is easy to obtain several quotes on-line, it is advisable to compare them carefully before choosing. There are law-firms which advertise incredibly low fees but these are not necessarily the cheapest at the end of the day.
Many add on fees for so-called ‘extras’ – often for work which is a regular part of any Conveyancing transaction and should therefore be included in the quote. And many of these firms provide a very basic and impersonal service.
It is advisable to go with a firm which is prepared to give you an inclusive quote, so that you can rely on not having to pay more when the purchase is completed. Also look for a ‘no purchase, no fee’ guarantee which means that you won’t have to pay any legal fees if the purchase doesn’t go ahead for any reason.
Work out all the costs involved when buying a property
The Solicitor should also give details of all the fees other expenses which will have to be paid in connection with the purchase. These are usually known as ‘disbursements’ and will include such items as the stamp duty payable to the government, the fee payable to the land registry for registering the transfer and search fees payable to the local council. Remember that you will have to pay all these fees on completion in addition to the purchase price.
Many of the properties suitable for letting in the Stratford area are leasehold flats. When buying such a property you will want a Conveyancing Solicitor who is familiar with the legal side of purchasing such properties and will be able to offer expert advice.
You will usually find that flats, especially those in larger modern blocks, are subject to an annual ground rent and to regular service charges. (These cover building management and repair costs together with insurance premiums. ) Many freeholders or their managing agents now require details of the tenancy when a property is being let, and often charge fees for giving consent to letting arrangements.
Your Conveyancing Solicitor will obtain details of all these charges and any other information which would be relevant when letting the property. This will enable you to factor the charges into your income calculations.