DIRECTOR, DOUGLAS & GORDON
I have around £350,000 to invest and I am wondering whether I’m better off investing in central London or venturing south of the River.
IN THE past I’d have said central as you’d be better hedged against capital value fluctuation and have a good steady flow of tenants.
However, the last five years have seen such an inflow of funds into property that supply has ballooned. Meanwhile, budgets for even corporate tenants have dwindled to such an extent that returns are now pitiful. I predict that capital value growth has peaked for the time being; the fact that buyers aren’t paying over-inflated asking prices in the centre is testament to that.
The real interest seems to be the “doughnut area” outside the centre. With Battersea Power Station and the American Embassy arriving, I suspect a good one-bed flat close to Battersea Park would stand you in good stead from both a rental and capital perspective.
Don’t expect a much better yield, maybe four per cent gross, but voids are less likely. Even a one-bed place on the cusp of your £350,000 budget – perhaps close to Clapham Common and Clapham Junction stations – is a good second choice.