17th
Aug 2020
Latest research released by a London based estate agent, shows that there is a continual rise in London based landlords turning their attention to potential investments in the North to achieve higher returns.
@stefiakti via Twenty20
The data shows that the number of London BTL investors/landlords investing in the city has fallen by 31% since 2010, and in the last ten years the number of capital based landlords investing in the North and West Midlands has shot up by 34%.
Of the 31% of London landlords that have stopped investing in the capital over half (17%) was from 2015-to the present, just after the extra stamp duty on second homes and BTL properties was announced.
On average any landlord buying a property in London over the past year will have had to pay a £24,600 stamp duty charge, whereas if buying a BTL property outside of London, landlords would have to pay on average £5,300; meaning London landlords are having to pay an extra £11,760 more after 2016 because of the extra stamp duty charge, whilst investing outside the capital most landlords would have only paid out on average an extra £3,910.
Mish Liyanage, managing Director of a group of property management companies, commented: “The research shows that just one in four London-based landlords purchased a buy-to-let outside the capital in 2010. However, over recent years, landlords in the capital have looked outside the South East for better returns and more affordable BTL property.
“We have seen a steady stream of London investors looking to acquire property in the North West. Since the introduction of stamp duty on second homes. A combination of a stamp duty surcharge on second homes and high house price growth has pushed landlords away from the capital and the south-east, over the past three years.
“City investors are looking for property in the North West, especially in the university cities, where they can enjoy yields of between 8-13%. For example in Liverpool, investors can acquire a high-quality three-bed, fully let HMO near a university, which will house students from £120,000 upwards.
“Student house share rents start at around £80 per week per room, including bills. However, ensuites and large bedrooms can be as high as £110 per week. There is a high demand for new and renovated shared accommodation for students and young professionals many of which are looking for affordable, shared accommodation.
“Rental yields with-in a mile’s radius from the university and city are excellent. The return on investment is very attractive too, with an average of 13% per annum (8% cash rental and 5% capital growth).”
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