Suburbs or city-centre property investing – in a post-Covid world?

October 6, 2020

In the past we have tended to want to invest as close to city-centres as we could afford as it meant bagging a convenient location that would be desirable for would-be tenants.

UK Property Investment

Now we need to look at investment locations with renewed eyes. Office workers are reluctant to return to working in city-centres, for a whole host of reasons.

Continental Europeans have gone back to work quicker than we have in the UK: with over 80% of office staff back at their desks in France, over 70% in Spain, yet less than 40% in the UK, although some city-centres are suffering more than others.

Perhaps it is about manageability?

•  Continental city sizes do not mirror those of the UK. In France, Paris has just over 2 m inhabitants and its second city Marseille c. 900k Yet London has a population of 10m and Birmingham 2.5m.

UK property in Cities and towns

Some regional UK cities are also proving to be rental hotspots. Central postcodes in Cities like Bradford and Liverpool offer average yields close to 10%, whereas the suburbs in places like London can still work for rentals, like Enfield or Croydon.

London and other big UK city centre economies are suffering with office workers reluctant to return to offices. Yet London and some other UK cities are quite unique, characterised more as networks of ‘villages’, think Blackheath, Barnes, Wimbledon, so some areas are suffering less.

Suburbs and less-populated areas are holding up, given the work-at-home culture with people more comfortable shopping and socialising locally. A trend being dubbed the ‘hyper-local economy’.

I know when I commuted daily from Surrey to work in central London, it was years’ before I really had time to get to know my neighbours. When I did, I realised what a great bunch they are. They have since become friends and a support network. During Covid there is some good to emerge – the time to linger more in my neighbourhood, in the suburbs, outside of London where we have the best of both worlds, access to one of the best cities in the world and the sense of community and countryside on our doorstep.

Stamp Duty ‘Holiday’ in England and Wales

If you are looking to take advantage of the SDLT ‘holiday’ it is best to not leave it too late as there may be delays in the conveyancing process as many investors rush to beat the deadline. For expats this is more important, given the SDLT holiday ends end of March 2021. At the same time a 2% SDLT surcharge is introduced for overseas property investors in April 2021, meaning paying 5% above the standard rate.

If you would like help finding the right buy-to-let properties for you then please get in contact.

My business focuses on helping time-strapped expats and busy business people who don’t have the local presence, or capacity, to acquire the targeted amount of properties for them. Property Venture® is an award-winning, Boutique property consultancy that finds the right investment properties for clients.

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