Wimbledon – Good time to buy property?

Following last month's article, I had an interesting conversation with someone who was thinking of buying his first buy-to-let property and he wanted my thoughts on the market and whether it was a good time to invest.

He was particularly worried with all the news headlines about the booming London house prices that there wouldn't be any demand from tenants. One of the best piece of advice I can give to those looking to invest in property is a simple trick of the trade. You can judge the affordability of an area property market (and thus how much demand there could be) by simply finding the ratio of the average property price to the average salary. The lower the ratio, the more affordable the property is.

When we put this to the test, we found that Wimbledon currently has an average property value of around £742,000. According to the Office of National Statistics, the average salary in Wimbledon is estimated at £39,685. This is a ratio of 18 to 1. Most lenders will only lend up to 4.5 times of the income, so to buy an average house in Wimbledon, a first time buyer would need to be on a salary in the late £130,000's. They would still need to take into account buying fees and raising the 5% deposit which then will be in the order of £31,000+

Tenants inability to raise that sort of money for the deposit is driving demand for rental properties. Whether you are a landlord with a portfolio or someone thinking of investing in the rental market for the first time, and If you would like some advice about buying to let, please feel free to email me at sam@masonandco.co.uk.