Where Should You Invest in Property?

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Where should you invest in property?  Should you invest in property in the expensive south or the more affordable north?

  • London is no longer the only property game in town
  • Buyers are increasingly buying in more affordable parts of the country 

Disclosure: Some of the links in this post or on this website may be affiliate links and if you go through them to make a purchase I will earn a commission. I only link to products or companies I consider to be of quality.

Are you one of the millions of people who know the long-term power of the London property market, want a piece of the action, but are priced out and can’t afford to buy anything there?

I know the feeling!

Even as an experienced London-based property investor, I usually have to say “no” to London properties these days.


Long-term, London house prices will always do well. However at the moment prices are high, supply is low, returns are low and harsher lending criteria mean buy-to-let investors may need to put in a deposit in excess of the standard 25% if they want to secure a mortgage.

In brief, now is not the easiest time to buy in London.

That is why so many savvy investors are looking elsewhere. Not being able to buy in London is not the end of the world.

Outside London

Other parts of the country – especially the North, Scotland, Wales and the Midlands – offer many of the very benefits London is currently lacking.

The difficulty of investing in London together with the ease of investing in many other parts of the country has led to an exciting new property phenomenon or strategy known as “rentvesting” or “rent2invest”.

Priced out of London, the South East and other expensive parts of the country, would-be first time buyers are choosing to live in rented accommodation and use their savings to invest in a buy-to-let property (or properties) in cheaper more affordable areas of the country.

When their buy-to-let property goes up in value, they then sell or refinance it to buy in London, the South East or other expensive area of their choice.

Topics covered

This blog considers some of the main benefits of buying in affordable or less expensive parts of the country, in particular: 

1. Affordability

2. Lower entry costs

3. Good rental yields

4. Easier mortgageability

5. Opportunities to add value

6. Prospects for long-term growth (though from a lower base).

1. Affordability

The headline reason for investing in less expensive parts of the country is affordability.

House prices vary a great deal in different parts of the UK.

London and the South East are known to be very expensive – but there are many affordable areas elsewhere. 

The UK House Price Index for February 2019 showed average house prices as follows:

Screenshot 2019-04-30 at 09.57.11.png

Although the London average was a hefty £459,800, the East Midlands, North East, North West, West Midlands, Yorkshire & Humberside, Wales, Scotland and Northern Ireland all had averages under £200,000.   

In several parts of the country it is still possible to buy a house for well under £100,000 – under £50,000 in some places.

musketeers sub box blue

2. Lower entry costs

Buying in an affordable part of the country with lower prices provides the big benefit of lower entry costs.

On a buy-to-let purchase of £100,000, the deposit based on a 75% LTV mortgage is £25,000, the stamp duty is £3,000 and legal and other fees, including any property sourcing fee, would not normally exceed £5,000.

You would therefore need a total of around £33,000 to afford such a property. 

Buy-to-let stamp duty rates ( as at April 2019):

Screenshot 2019-04-30 at 09.57.29.png

3. Good rental yields

A great advantage of lower value properties is that they usually provide a much better rental yield than expensive properties – typically 6-8% compared to 2-4%.

They are therefore good performers in terms of income accumulation. 

A good rental income means you are less likely to have difficulties meeting your mortgage from your rents in the event of rises in interest rates. 

4. Easier mortgageability

Lower purchase prices mean you need a smaller deposit and mortgage to buy.

With buy-to-let properties, mortgage affordability depends fundamentally on the rental income.

With affordable properties typically providing good rental yield, and with purchase prices relatively low, the access to mortgages – mortgageablity – is typically easier.

Stress tests or other restrictions imposed by lenders are less likely to have an adverse impact. 

Why become a homeowner (the many benefits enjoyed by homeowners)
Why renting is super stupid (rock solid reasons why you should buy not rent)
Easy home ownership (10 super-powerful reasons for homeownership)

Property coach module

5. Opportunities to add value

Another big reason to invest in affordable areas is the greater availability of rundown properties which can be repaired or refurbished to add value.

This value can be taken out by refinancing, or left in the property to be realised on a subsequent sale.

Adding substantial value to a property can provide you with a prized “no money left in” or “little money left in” deal.

For example, say you bought a property for £75,000 including purchase costs and spent £15,000 refurbishing it – total outlay £90,000 – and after refurbishment the property is worth £120,000.

If following refurbishment you remortgaged at 75% LTV, you would be able to borrow £90,000 ( the total amount you spent on buying and doing up the property), achieving a “no money left in” deal.

6. Prospects for long term growth

It is not only good income that you can obtain by buying affordable properties outside expensive regions like London and the South East.

You can also source properties with good prospects of capital growth or value up-lift.

Of course the absolute level of growth will not be as good as in more expensive areas, due to the lower price point. However the rate of growth can be as good or better, depending on where you buy in the growth cycle. 

As a general rule, high income yielding residential rental properties do not do as well in terms of capital growth.

If your primary objective is growth, you will therefore need to target the rarer, better quality properties in the best or better locations where there is usually the highest probability of price growth. 


If you live in London or another expensive part of the country, property ownership is not beyond you.

There are many relatively inexpensive parts of the country where buyers of average means can become proud property owners.

If you are a would-be first time buyer you can look at rent2invest. If you are already a homeowner, you may be able to release equity from your  home to raise a deposit as the first step to buying another property.

There are currently many pluses to investing in affordable parts of the country.

The longer you delay, the more prices are likely to increase, the more expensive or  harder it will become for you to buy.

Your comments

Have you thought about rentvesting or releasing equity to buy in an affordable part of the country? What concerns do you have? What is holding you back?

Disclosure: Some of the links in this post or on this website may be affiliate links and if you go through them to make a purchase I will earn a commission. I only link to products or companies I consider to be of quality.

Dalton Barrett
Rebel Property Coach

About the author

London-based blogger Dalton Barrett has over 30 years experience as a property solicitor, conveyancer, investor and coach. Read about his unconventional worldview of property here

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