London property investment: maximising your return
For investors looking to buy in the capital, the top priority is making the most of their London property investment. This isn’t only about the ongoing income the property will generate, but also buying in the first place.
We’ve put together a useful start guide, if you are thinking about investing in London property.
An accountant is key
With the rules on taxes that apply to property tending to change every time the Chancellor announces a new budget, these questions are best looked at with the help of an accountant who specialises in property investment. Don’t be afraid to go in with a 5-10 year plan of what you want from your investment – the more information you can give them, the more they can maximise your potential savings.
We’ve had the opportunity to work with a number of excellent firms over the years, helping our clients to reach their property ambitions – so please give us a call if you would like a trusted recommendation.
Buying property in London can be quite complex, so you will need a solicitor, but there are a few key issues it is really useful to be aware of.
Freehold or leasehold
- A freehold property stands on ground that it owns
- A leasehold property is a building, or part of a building standing on ground that belongs to the freeholder
The length of the lease has a direct effect on the value of the property, and a normal lease length is 100-999 years, anything shorter will cost less in the short term, but lenders consider short leases more risky so you may have some trouble finding finance.
In London, the individual borough councils control planning permission. This means that if you’re looking to buy a property and modify it, you can’t assume that what’s allowed in one area will be the same somewhere else. There are also landowning estates in London which place further restrictions on altering period property. It can prove to be a long and expensive exercise to overcome the red tape
Stamp duty land tax (SDLT)
Property transactions in England and Wales are subject to stamp duty land tax, which is levied when you buy a property. It is added on to the asking price, and paid to Her Majesty’s Revenue and Customs (HMRC) when the purchase is completed on.
If you would like to speak to a member of the team about your investment opportunity, please give our team a call on 0208 743 9101