Last year, Manchester was named the best place for landlords to invest, but it’s slipped down to fourth place this year. Yet, it remains the top spot in the north. The main reason for Manchester falling down the rankings is that there are now more vacant properties and fewer residents renting privately.
Despite this, Manchester can still be attractive as it has the highest yield on the list so far (5.9%) and house prices have increased, on average, by 4.2% each year.
This year, Luton entered the top 10 for the first time. The main reason for this is the city’s relative improvement in long-term house prices. Luton was found to have the strongest property price growth out of all the cities included in the research. On average, property prices have increased by 5.2% year-on-year.
Luton’s location means it’s known as a commuter city, which could have helped push up prices, especially as workers left the capital during the pandemic.
A buy-to-let property can seem like a simple way to generate a passive income and you could benefit from house price rising further in the long term. However, you need to think carefully before becoming a landlord as it’s not the right decision for everyone.
Landlords must meet certain legal regulations and it would be your responsibility to ensure the property is safe. This can take up more time and money than you may think. You also need to consider how a void period, when the property is empty, would affect your income, or how you’d cover significant housing maintenance costs if they were required. Make sure you carry out your research before you become a landlord.
If you plan to use a mortgage to purchase a buy-to-let property, you should also be aware that lenders will often have different criteria than if you were buying a property to live in. For example, rather than looking at your affordability, they will consider the potential rental yield when assessing how much you can borrow, and you’re likely to need a much larger deposit.
If you decide that a buy-to-let property is right for you and want help securing a mortgage, we’re here to help. Please contact us to discuss your needs and plans today.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
Buy-to-let mortgages are not regulated by the Financial Conduct Authority.