Northern regions best for buy-to-let

IT HAD been a case of ‘bye-bye, buy-to-let’ as tax changes in April stopped landlords from claiming full tax relief on mortgage interest payments. That, on top of the 3 per cent surcharge payable on second properties, saw many property investors quit the market.

But Rishi Sunak’s stamp duty holiday has made investing in property far more attractive again, particularly in the North where the rental yields are better.

The axe on stamp duty for the first £500,000 of a property’s purchase price applies on investment properties as well as your primary home. It is available until the end of next March.

Cammy Amaira, of the Tipton & Coseley Building Society, says there is definitely a trend towards investors buying in the North West. ‘Particular interest is coming from British expats who work overseas and are building up their property portfolios in the UK,’ he adds.

North London estate agent Jeremy Leaf says: ‘We’re seeing professional landlords who we haven’t seen for a while taking this chance to add to their portfolios.’

Aneisha Beveridge, head of research at Hamptons International, says: ‘The biggest savings from the stamp duty changes will be available for landlords purchasing in London and the South, while landlords purchasing in the North won’t benefit as much.

‘Yet it’s these Northern regions that offer investors the highest yields – with the top ten highest yielding local authorities all located in the North East and North West.’ She says the top three highest yielding areas – Hartlepool, Burnley and County Durham – will see the average investor stamp duty bill fall by just £730, or 16 per cent on average. Yet the average yield there is over 10 per cent.

‘For most landlords, investing in the North looks more appealing, but for those who think capital growth will once again be stronger in the South in the future, the stamp duty changes could be enough to entice them to invest,’ adds Beveridge.