BEST PLACES TO INVEST IN THE UK BUY-TO-LET PROPERTY DURING STAMP DUTY HOLIDAY
For an investor, the proportionality of investment and profit is key in determining where and when to invest. Regions that yield high returns in buy-to-let with regards to the investment put in will always be a preference.
London has always been preferred as it is the center of the country and historically house prices gave always seen an upward trend while rental demand has always been high with little possibility of it seeing any significant decrease.
The stamp duty holiday provides a profitable opportunity for investors in buy-to-let properties in other regions as well. The introduction of the stamp duty savings was an incentive to help homebuyers and boost the UK property market during the Covid-19 pandemic, the effect of which meant that buyers completing a purchase on a property for less than £500,000 did not have to pay stamp duty.
Best places to invest in the UK:
A study conducted by the CIA Landlords has revealed a list of areas which be highly profitable due to the stamp duty savings. It reveals the cheapest house prices compared to the rental income to uncover the best cities to invest in for buy-to-let.
Salford in greater Manchester tops the list as the best city in the UK to buy property to let out. With an average house price of £173,311. The prices are affordable as average rent prices are in the region of £1,052 per month. A savings of almost a £1000 in stamp duty and a profitability rating of 6.27/10 makes Salford an investment in homeownership a profitable venture.
Manchester follows Salford as the next best city with slightly more expensive properties at an average of £193,681 but also higher rental income at an average of £1,174 per month. Stamp duty savings of £1,374 and a profitability rating of 6.26/10.
Leeds comes in at third receiving a rating of 6.26/10. Average property prices are around £217,415 and monthly rental income is at an average of £1,216. Leeds brings an average of £1,848 in stamp duty savings.
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The Top London locations for Landlords Buying-to-Let:
South England has generally been a low scorer in CIA rankings because of the high house prices and not corresponding high rents. However, certain areas of London and South-east England have ranked high in CIA landlords rankings as a good region to invest in due to the stamp duty holiday with Havering, Newham, and Banking & Dagenham taking the top three spots. Havering has an average stamp duty savings of £9,792! Average house prices at £395,832 and rental income at £1,895. This lands Havering a profitability score of 6.40/10.
Havering is followed by Barking, Dagenham, Newham, and Enfield with average house prices ranging between £200k-£400k. Along with all the top London locations having an average monthly rent price of £1,000 per month. Hence, landlords looking to invest in the capital will certainly reap the rewards.
The Least Sensible Buy-to-Let Hotspot for Stamp Duty Savings:
CIA also lists the worst cities for buying to let with High Wycombe as the worst of all. An average price or a whopping £430,891 but an average rental return of only £945 per month lands High Wycombe a score of 3.84/10 of profitability followed by Cambridge and Reading at 3.95 and 4.42 respectively.
Kensington and Chelsea also fall under the least sensible buy-to-let option to invest in with average house prices ranging over £2 million(rate-5.46/10). Following these areas are Ealing, Haringey, and Bromley which are also considered less business-savvy options with a mirror profitability ROI (return on investment) as Dagenham (£302,060), Barking, and Enfield (£399,517).
Having said this, if you have a few million pounds to spare and are looking for a good profitable investment opportunity disregarding stamp duty savings, then Westminister (with a score of 8.04/10) is the place for you. Following Westminister are Brent, Wandsworth, Southwark, Lambeth, Barnet, Camden, and Hammersmith (scores ranging from 6.56/10 to 8.04/10) where no other area below £500,000 can match up to this areas RIO.