Should I Invest in Derby or London?
With my background in the East London property market I thought it would be interesting to look at the numbers on buying a property in Derby compared to investing in East London.
For our example in Stratford, East London we will be looking at a two bed Victorian terrace in a popular location close to the Station.
|Deposit (assuming 25%)||£118,750|
|Monthly Mortgage Interest (assuming a rate of 2.5%)||£742.00|
For the same spend in Derby we would be looking at purchasing 5 two bed terraces in the City Centre.
|Purchase Price (£95,000 per house x 5)||£475,000|
|Deposits (again assuming 25%)||£118,750|
|Monthly Mortgage Interest||£742.00|
The above figures are just a guide and don’t include a lot of variables but do show that if investing for monthly cash-flow, Derby offers far greater opportunity than London. The barriers to entry are also far lower as you can get started with a much smaller initial investment compared to the amount needed in London.
The changes to the way that Landlords are now taxed and the new requirements of mortgage lenders in their affordability calculations also act in making Derby even more appealing than London.
Of course where London has generally always performed well is in the exciting capital appreciation that it offers. However as per the warning on all investments, past performance is not a guarantee of future performance and there is no doubt that the market in London is more susceptible to external pressures as is seen in the greater impact that Brexit has had on the London property market.
With property the key to success wherever you buy is always to go for the right property at the right price! If you are considering investing in Derby and would like a chat and some advice then please do get in contact with us.
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