Freddy Barker speaks to Jo Eccles of Sourcing Property about what to consider when buying an investment property for your offspring
UHNWs are increasingly frustrated by underperforming fund of funds and want tangible investments with realistic returns instead. Thus Jo Eccles, the managing director of Sourcing Property, is in demand.
Unlike other property search companies who focus on the top end of the market, Jo’s team also cater for sub-£1 million properties that fit the bill. And, given these provide the next generation with a base, they have practical value too.
‘Parents buying for children fall into two categories,’ she says. ‘Many focus on the periphery of expensive areas; for example, Pimlico, Fulham, Clapham, Putney and Brook Green where a nice one bedroom flat starts from £400,000 and a two bedroom flat from £550,000.
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The quality of the property is just as important as the location
‘Others, whose children are much younger and won’t be moving in soon, prefer more up-and-coming areas such as Maida Vale or West Kilburn where they can park their money for a longer period and benefit from higher rental yields of circa 4.5 per cent.’
What unites the two, Eccles says, is that it’s no longer enough to buy in a good postcode; an equally impressive property is needed too.
‘Parents buying for children should make sure they choose carefully. There are a lot of average properties for sale and it’s hard to know whether what you’re seeing is representative of what you should be settling for or whether you should be holding out for something better.
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‘Also, make sure you do your research,’ Eccles continues. ‘We were hired a few years ago by a father whose daughter had chosen a property on the advice of the buying agent they were using at the time, only for them to hear the rumble of the tube below just as they were agreeing terms of a non-refundable deposit.
‘Finally, make sure you get organised before you start your property search. This means getting your tax affairs and borrowing options in place — if you are able to pay for the property in cash and refinance afterwards then that will definitely help the negotiations and the price you ultimately pay.’
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