Where Should I Invest?

With the brunt of the Coronavirus pandemic firmly behind us, most people would agree that there is a great opportunity to invest in the immediate future. But the question that keeps coming up time and time again is “What should I invest in?”

Despite the temporary stamp duty reduction announced last week, most people agree that for the most part, the London property market is DEAD! Low rental returns and stagnant capital growth have left people looking for other options to secure their funds for the long term, but what are the options?

1. Cash
Secured up to £85,000 but will devalue over the next decade because of inflation

2. Gold
A secure option, but typically seen as a store of value rather than an investment vehicle

3. Stock markets
Likened to gambling for most people and not necessarily asset-backed

4. Crypto currencies
Does anyone really understand this enough to invest large amounts in it?

At this rate, even postage stamps look like a great investment(!)

Enter: Northern Buy-to Let Property

It’s long been known that property ‘Oop Norf’ can give substantially better returns. With a combination of cheaper housing stock and reasonable rents, it’s no wonder that Londoners are interested in the idea of securing their future in property North of Watford.

But there are always a few questions in the back of people’s minds:

1. I don’t know the area – how will I know what to buy?
For Londoners, northern investments must be built around a trusted partner that knows the areas and has experience in a variety of models, so they can help you build a strategy that suits you

2. It’s too far – what if the boiler breaks down?
The value of a great Letting and management agent should never be understated. Remember: pay peanuts, get monkeys! The distance also allows investors to be emotionally detached from the investment and make financially optimal decisions.

3. There’s no real capital growth, is there?
In an article written in November 2019, Savills expect the capital growth over the next decade to be predominantly in “lower value markets much further from the capital”, citing that they “have seen nothing like the 10-year price rises seen in London”.

As the 4th largest city in the UK, Leeds looks like a promising opportunity. It boasts the largest legal, finance & insurance centre outside of London and with 4 Universities dotted around the city, there is a never-ending supply of skilled labour to fuel the growth.

Compared to London, Leeds boasts:

1. Higher rental yields – making you money while you sleep

2. Better capital growth – growing your wealth over the next decade

3. Lower entry prices – allowing your money to go further

4. Higher wage growth – increasing the demand for rental accommodation in the city

Not many places around the country can compete with that.

It’s clear that there’s still time before Londoners become comfortable with the idea of investing outside the M25, but those that are willing to take the leap will be rewarded with excellent returns.

Are you ready to jump?