Assetz® News - The underground route to success

The underground route to success

28th August 2008 |

According to some, the world is watching as the UK prepares to bury buy-to-let, the grave dug and the mourners gathered as the coffin arrives in a hearse.

But according to one overseas investor, this is anything but the case, particularly for London, where he suggested that far from being six-feet under, it was something else underground that can make the difference.

Speaking to PropertyWire, South African Scott Picken, chief executive of the International Property Solutions company, believes London remains one of the top locations in the world for buy-to-let investors.

He stated: "The most important thing with the UK market is the fundamentals are in place and demand outstrips supply. I'd say if someone is taking a medium to long-term view they can make good and wise and studious investment for the future."

Long-termism, of course, is exactly what some are preaching, since this approach to buy-to-let means investments are less dependent on any given period of time being a fruitful one, whether in terms of rental rates, property prices or any other financial consideration. Instead, the long-term approach is geared up to ensuring an investment portfolio is equipped ride out the various troughs in the expectation that the peaks will be higher and longer.

But for Mr Picken, location and transport are also vital issues for buyers. His view was that "knowing where tenant demand is and then finding a property that's within that tenant demand" is vital, with the key in London being to never buy a property more than ten minutes away from a tube station.

The importance of being close to the underground in such a crowded city (and one where population density is at its highest north of the river where most of the underground lines run) may be reflected in the locations Mr Picken has said are the prime locations to invest in, these being Canary Wharf, Greenwich, Wimbledon, Clapham and Putney. All of these, of course, are connected by tube, although in the case of Greenwich it is only at North Greenwich on the Jubilee line (near the dome). However, Greenwich is also served by the Docklands light Railway.

Investors looking for more good news in this regard may welcome the latest developments on the Underground. Transport for London (TfL) states that it is currently undertaking "the biggest transformation in the Tube's history". It has promised more trains at a higher frequency and with more comfortable rides. In addition to this, stations will be made more attractive, security improved, information made better and accessibility enhanced.

With such a project in the offing over the next decade, those investing in buy-to-let in London may find there is another reason to take a long-term view. If property near Underground stations now is more attractive, this may be more so in a decade from now, should the enhancements TfL has promised make using the system a much better experience than it is right now.

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