Buying old or new: which is a better investment strategy?

  Buying old or new which is a better investment strategy?

The ‘old versus new’ debate has raged for years. It’s one which has no right or wrong answer, and that answer will vary depending on whether you are buying a home to live in or investing in a buy-to-let property.

In this article, we’re going to focus on buying purely as an investment – buying a buy-to-let. Is buying an older, more established property better than a new build? Well, it depends on the location, nearby amenities, proximity to employment opportunities and so on, all of which are linked to a property’s true value. It also depends on the type of tenant you are targeting, and the type of property, among many other factors.

The question we’ve posed is a question without a clear answer, but if you’re a potential investor, you’ll need to weigh up the incentives and disincentives of investing in new over old – or old over new.

What are the incentives for buying a new property?

  • More desirable for renters
  • Higher rents
  • More energy efficient and environmentally friendly
  • Fewer maintenance and repair issues
  • Building guarantees and appliance warranties will be included
  • The property is ‘tenant-ready’
  • Designed with modern lifestyles in mind

What are the disadvantages of buying a new property?

You’re paying for the developer as well as the property
Premium price investment
Lack the potential to add value to maximise capital growth
Less floor area than an old property with a comparable number of rooms

What are the incentives for buying an old property?

  • Strong resale value
  • Ability to renovate and add value – and increase returns
  • Maintains value even in a slower market
  • Long-term capital gains
  • Often include attractive period features which appeal to renters
  • More floor space

What are the disadvantages of buying an old property?

  • Higher heating and energy bills
  • More maintenance and repair issues
  • Can require a lot of renovation work to make it marketable to tenants
  • Require more investment upfront if improvement work is necessary

However, we could easily argue that for portfolio landlords, a combination of both old and new properties is best. With new properties you’ll minimise the amount of tax you need to pay, while older properties can be renovated to enhance their rental and market value. What’s more important is the location and prospect for growth, and properties in areas like Westminster, whether new or old, will always present investors with the possibility of strong rental yields and capital growth.

If you’re looking to invest in a buy-to-let property in Westminster, Pimlico, Belgravia or within the SW1 area, get in touch with us today. We have experience of advising investors on the purchase of both new and period properties

Getting in touch

ANDREW REEVES - Westminster

81 Rochester Row, Westminster, London SW1P 1LJ
Sales: 02078811310
Lettings: 02078811315

ANDREW REEVES - Pimlico

63 Lupus Street, Pimlico, London SW1V 3EY
Sales: 02078811320
Lettings: 02078811325