LendInvest BTL Index Identifies North/South Divide Between Rental Yield and Capital Gains Opportunities

• Findings come ahead of planned mortgage tax treatment changes

• World’s largest property P2P lender makes predictions for 2016 Buy To Let market

London, 14 December 2015 – LendInvest, the world’s leading online marketplace for property, has released the latest quarterly research on the UK Buy To Let market, tracking changes and trends in rental yields, capital gains and landlords’ total return on investment since 2010.

Key findings this quarter:

Northwest remains lucrative for landlords. Manchester, Liverpool, Cardiff, Coventry and Oldham come out top for rental yields, followed closely by Sunderland, Blackburn and Durham

London & Southeast leads house price growth. All Top 15 performing postcode areas for capital gains located in London and surrounding regions

Inner London takes only 18th place for rental yield, but claims 1st position for capital gains

Capital gains continue to track average house price. 80% of the 15 best postcode areas for capital gains also feature in Top 15 for average house price

Rental yields are no indication of average house price. Only 1 of the Top 15 postcode areas for rental yield also features in Top 15 for house price (i.e. Outer London)

On BTL tax treatment and 2016 predictions, Christian Faes, CEO of LendInvest, said:

“This quarter’s findings are surprising in their likeness with figures for the last period. If a buy to let bust really was just around the corner, we should be seeing more differentiated findings in these numbers.

“Next year, we could see some weakening in London’s dominance of capital gains tables if house price growth does soften slightly as forecast, and as new BTL stamp duty hikes take effect. Inner London margins may narrow slightly, creating opportunities for house prices in other postcode areas, particularly those in the south of England, to better compete.

“The Chancellor’s planned changes to mortgage interest tax relief and stamp duty for landlords will help to professionalise the buy to let market, for the benefit of tenants and aspiring homeowners. Landlords whose tax payments under the new regime make letting their properties unsustainable, may make arrangements to leave the market. In turn, we will see fewer highly geared rental properties that push up prices and take stock out of the housing supply for aspiring owner-occupiers and first-time buyers drawn to densely populated urban area for work.

“Across the country there is still no one place for market-leading yields and capital gains. 2016 could be the year of the “cross-country landlords” – professional landlords who live in one city and rent out houses in another. We could expect to see more landlords letting property in the North and Midland’s major urban areas for more immediate upside, without moving from their family homes in which gains can be longer to materialise.”

Note to Editors

• Interactive maps are available to embed via the share button above.
• ‘Inner London’ comprises postcode areas: E, EC, W, WC, SE, SW, N and NW.
• ‘Outer London’ comprises all other postcode areas within Greater London remits.
• Data sources: Zoopla and Land Registry

Contact

Carmen Murray, PR Manager – [email protected] / 020 3451 9624 / 07713 110 624