Buying City centre property

brooklandsblue2.0 said:
Thanks mate that’s really good advice and exactly what I was looking for. Only nagging thought I have is the old “dead money” thing. That particular apartment would cost me 1800 p/m. Mortgage would work out around 900 for me (have a decent deposit) but like u say - fees etc are a killer. Appreciated
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This is what I'd do in your position.

Buy 2 cheaper flats in town for about half what you're looking at. So around £180k each. However, set up a limited company and buy them through that. You'll have to put 25% deposit down for a limited company mortgage, so £45k for each one. Live in one of them for three years and rent the other out. When you come to move, remortgage them back to 75% Loan to Value and take the equity out.

For example, if you get a flat for £180k, live in it for 3 years and it goes up on average 10% per annum, then after your 3 years it'd be worth £240k. You'd have to remortgage and leave 25% (60K) in. That means you'd be able to get your original £45k back out (£60K increase in value, less £15k needed to make up the 25% deposit).

Then when you buy your next home, you wouldn't get hit for second home stamp duty as the flats wouldn't count as they'd be in a limited company. You'd also have a couple of flats in town worth £240k each that are no money down (you'd be able to take your deposit money out).

The downside is
  • You'd get hit with a stamp duty surcharge when buying the flats in the limited company.
  • Your mortgage on your limited company property will probably state you shouldn't be living in it yourself. You'd have to check this out.
  • 10% increase per year is rather optimistic, but hopefully you get the gist of what I'm suggesting
  • You wouldn't get to live in a swanky pad in town as £390k would get you.
 
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Wafty Cranker said:
This is what I'd do in your position.

Buy 2 cheaper flats in town for about half what you're looking at. So around £180k each. However, set up a limited company and buy them through that. You'll have to put 25% deposit down for a limited company mortgage, so £45k for each one. Live in one of them for three years and rent the other out. When you come to move, remortgage them back to 75% Loan to Value and take the equity out.

For example, if you get a flat for £180k, live in it for 3 years and it goes up on average 10% per annum, then after your 3 years it'd be worth £240k. You'd have to remortgage and leave 25% (60K) in. That means you'd be able to get your original £45k back out (£60K increase in value, less £15k needed to make up the 25% deposit).

Then when you buy your next home, you wouldn't get hit for second home stamp duty as the flats wouldn't count as they'd be in a limited company. You'd also have a couple of flats in town worth £240k each that are no money down (you'd be able to take your deposit money out).

The downside is
  • You'd get hit with a stamp duty surcharge when buying the flats in the limited company.
  • Your mortgage on your limited company property will probably state you shouldn't be living in it yourself. You'd have to check this out.
  • 10% increase per year is rather optimistic, but hopefully you get the gist of what I'm suggesting
  • You wouldn't get to live in a swanky pad in town as £390k would get you.
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Not a chance 10 percent rises per year over 3 years. Literally zero chance.
 
I moved to house about 2 mins from a train station and it has been a life changer. You waste so much of your time commuting and you don't see it until you don't have to. Right now I can leave my house at 8:25 get the 8:34 comfortably and be at my desk for 8:50.

Buying in the city is higher risk on capital values - as WW said the market is driven by investment and when that stops it will be like a switch going off - a lot will depend on the supply at that time, if some big schemes are completing the market could die a death - if not then it could be ok as schemes in the pipeline just won't get built.

That said the higher end will be less impacted - investment yields do not work for premium apartments and they tend to go to owner occupiers - people with serious cash tend to buy them.

On balance - I would pick a couple of stations in nice areas: Marple - Heaton Chapel - Wimslow - Bramhall - Cheadle Hulme - etc. And buy something within a 5min walk. If you can find something cheap you could rent out afterwards then even better but you might need all of your cash, capital value will be solid though.
 
brooklandsblue2.0 said:
Hi all

I’ve recently sold my house and was looking to buy a semi detached house somewhere in south Manchester. This has proved difficult with a budget of 390k max. We hadn’t previously considered BUYING in central Manchester but as me and the missus both work in the centre (and commute daily on the delightful metrolink for 25 mins each way) we are now wondering what the pros and cons are. I’m not interested in something a bit further out (where I know u get more bang for your buck - Ancoats etc) as I’m worried about buying something that years down the line we might get stuck with. Something has come up at the century buildings just off Deansgate which seems like a safer bet than one of the 100s of identikit apartments popping up all over town. And reading the article below strengthens the view that this is a really good location for central mcr....

https://www.manchestereveningnews.c...9008#ICID=ios_MENNewsApp_AppShare_Click_Other

Does anyone have any experience of the pros and cons of buying something like this? The one we’ve seen is on at 340k but has been on since Jan 2019 so I’m assuming they’ll take an offer.

Realistically we’ll prob only stay 2-3 years. Not looking to make loads of money on it, but obviously don’t want to get stuck with something that we can’t sell in a few years meaning we take a loss! Cheers
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I take it that property is in the rebuilt part of Century Buildings? I bought one off plan in the renovated part of Century Buildings overlooking Parsonage gardens. This was well before the saturation of property in the city centre so easy to let out then.

I think the advice in this this thread to rent for a while rather than buy property in the centre is good advice.
 
Have you though about buying somewhere just out the city centre. Places like Levenshulme, fallowfield have some really nice houses and are a bit cheaper
 
worsleyweb said:
A lot coming on the market. The prices in the City Centre are underpinned by overseas investment. If that dries up as they find that there are not endless queues of people in Manchester who can afford £1500 a month rent for a 2 bed than prices will fall. Factor in the service charge that Brooklands will be paying at say £2k a year and I would stick to a semi in South Manchester. No service charge and can be in town in twenty minutes either by tram or taxi. There is little evidence of apartments holding there value in Manchester as the cycle of stock from last time has been poorly maintained.

Each to his own but a freehold semi in South Manchester (especially Trafford if you have kids and want a free Grammar School place) seems to make considerably more sense than a 250 year leasehold.
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So somewhere down the line there is an opportunity to buy an in town apartment 'cheap'?
 
Gaudion M said:
I moved to house about 2 mins from a train station and it has been a life changer. You waste so much of your time commuting and you don't see it until you don't have to. Right now I can leave my house at 8:25 get the 8:34 comfortably and be at my desk for 8:50.

Buying in the city is higher risk on capital values - as WW said the market is driven by investment and when that stops it will be like a switch going off - a lot will depend on the supply at that time, if some big schemes are completing the market could die a death - if not then it could be ok as schemes in the pipeline just won't get built.

That said the higher end will be less impacted - investment yields do not work for premium apartments and they tend to go to owner occupiers - people with serious cash tend to buy them.

On balance - I would pick a couple of stations in nice areas: Marple - Heaton Chapel - Wimslow - Bramhall - Cheadle Hulme - etc. And buy something within a 5min walk. If you can find something cheap you could rent out afterwards then even better but you might need all of your cash, capital value will be solid though.
Click to expand...
Bramhall only has one train an hour to Manchester I think, bit of a pain in the arse.
 
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