Should property investors avoid buying property in the south of England?
A new report on yourmoney.com has suggested that investors who wish to purchase buy-to-let property in the UK should avoid buying property in the south.
Quoting stats from property portal Rightmove.com, average property prices in London could reach a whopping £1 million.
And, with new stamp duty taxes on second homes and buy-to-let properties, buying a property in the south of England will soon come with an even heftier price tag.
An additional 3% stamp duty taxes will be added to current costs. This fee will be felt much more at the higher end of the housing market.
According to HMRC, the following tax rates will be applied to buy-to-let and second homes from April 2016.
|Stamp Duty Rates (on purchases)|
|Property value||Standard rate||Buy-to-let/second home rate
|Up to £125,000||0%||3%|
|£125 – £250,000||2%||5%|
|£250 – £925,000||5%||8%|
|£925 – £1.5m||10%||13%|
Buyers could save money through purchasing property with a lower price tag – namely in the north of England.
Top northern property hotspots include:
It is thought that the government’s push of the ‘Northern Powerhouse’ has made many companies and people migrate north for jobs.
Popular university cities such as Liverpool, Manchester and Leeds (just to name a few) pull in a large amount of students per year, many of which stay in the area to work.
The demand for rental property in popular areas in the north of England cannot be ignored. In fact, Manchester was named as the UK’s number one place for buy-to-let returns in 2015 by HSBC.
With landlords looking north for lower entry level property investments and higher returns, experts believe that investors should consider opportunities outside of London and the south to generate the best returns.