In a recent interview with Property Tribes, Stuart Law, Chief Executive and founder of Assetz PLC, who was named as one of the most influential figures in property in the UK by The Telegraph, claims that the time for investing in the ‘Northern Powerhouses’ is now!
George Osborne’s latest attack on buy-to-let investors has made it abundantly clear that they are no longer welcome in London. The stamp duty levy, combined with spiralling property prices, are significant deterrents. So where should investors look to in order to mitigate the affect of these changes and maximise their ROI? Stuart Law of Assetz For Investors advises landlords to look North, where lower acquisition prices, better potential for capital growth and higher yields can all be found.
“The impact of the new tax on mortgage interest is very pronounced in the overpriced South. An investor with £200,000 to invest in the capital would need a £400,000 mortgage to buy a typical £600,000 property. If the gross yield was a typical 4% and the mortgage interest rate was 4% and the investor was a higher rate tax payer, they would actually have to pay £4,400 per annum to own the property and live in hope of further price growth to avoid losing money year after year.”
“If the same investor bought two £100,000 properties in the North, for cash, at a typical 7% gross yield then the investor would receive £9,100 per annum on their cash, before tax, and still benefit from full house price growth in that location.”
“For investors seeking income, rather than speculators hoping for house price growth, perhaps now is the time to heed the Government’s messages about Buy-to-Let, and investing in London generally, and look to the North instead.”
“For people based in the South, investing on your door-step should not be the first option. As prospective home owners are increasingly priced out of the Capital, more people based in the South will be heading from here to build their livelihoods in the emerging Northern Powerhouses. The balance of power is now starting to lean towards the North.”
Full article from Property Tribes can be found here: http://www.propertytribes.com/can-buy-let-still-profitable-2016-t-127623368.html