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Ten places where landlords can make the most profit now

Ten places where landlords can make the most profit now

Brighton has retained its crown as the most profitable place to be a landlord for the second year running, new findings have claimed.Taking into accou

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Brighton has retained its crown as the most profitable place to be a landlord for the second year running, new findings have claimed.

Taking into account rental fees charged to tenants and landlord costs, buy-to-let investors in the seaside resort can make a monthly profit of around £570, insurance group CIA Landlord suggests.

At the other end of the spectrum, St Albans has the poorest prospects for landlords this year, with some potentially making a loss of more than £700 a month, the research claims.

The findings argue that the majority of boroughs in London are ‘unprofitable’, with profitability nearly halving since January last year, amid a major exodus from the capital.

Where to invest? 20 of the best and worst locations in Britain for making a profit as a landlord in 2021

Where to invest? 20 of the best and worst locations in Britain for making a profit as a landlord in 2021

Where to invest? 20 of the best and worst locations in Britain for making a profit as a landlord in 2021

Buy-to-let investors are still required to pay a 3 per cent stamp duty surcharge on second homes worth more than £40,000. 

This surcharge has remained in place during the Chancellor’s stamp duty holiday, but some property investors have, in any event, been able to reduce their overall costs in some instances.

Richard Wayman, a director at CIA Landlord, said: ‘Covid-19 has undoubtedly shifted the way new landlords will be looking to invest in 2021, and our ranking makes it clear that considering location alongside price has never been more crucial.

‘When looking into the true costs of being a landlord this year, it can certainly come as a surprise to some at just how expensive certain requirements are as well as the fluctuation in these costs.

‘Before taking your first step into the property ladder, we recommend you consider all of the costs involved in becoming a landlord and ensure you invest in an area that is stable and will be profitable for you in the long term.’

Top 10 best places for landlords to make a profit this year

Top 10 best places for landlords to make a profit this year

Top 10 best places for landlords to make a profit this year

10 locations in Britain where CIA Landlords say landlords could end up making a loss

10 locations in Britain where CIA Landlords say landlords could end up making a loss

10 locations in Britain where CIA Landlords say landlords could end up making a loss

Below Brighton, Bangor, Portsmouth and Leeds were all among the top ranked locations for landlords wanting to make a tidy monthly profit.

Lancaster, Bristol, Coventry, Manchester, Nottingham and Salford also made it to the top ten in CIA Landlord’s latest findings.

At the other end of the rankings, buy-to-let homes in St Albans, Cambridge, Solihull, Chichester and Wells could potentially leave landlords forking out more money than they are raking in.

In St Albans, landlords could find themselves losing over £700 a month, while in Cambridge, the monthly loss could end up being nearly £600, given high property prices and hefty mortgage repayment costs in the famous university city. 

‘Due to the average property price, cost of a mortgage, monthly fees and rent charge changing throughout Covid-19, if you’re not careful there are a number of locations where you will find yourself at a loss in profit per month in 2021’, CIA Landlord said.

Salisbury, St Davids, Chelmsford also made their way into the top 10 poorest spots for landlord profits this year, according to the findings. 

London losing its way?

The latest findings by CIA Landlord also suggest that most of London has become ‘unprofitable’ for landlords over the past year.

It says that profitability for landlords has slumped by 48 per cent since January 2020.

‘Rising property prices and decreasing rental rates are squeezing profit margins for landlords, leaving 27 out of 33 London boroughs unprofitable in 2021, marking a massive dip from our ranking last year’, CIA Landlord said. 

Unprofitable? The latest findings by CIA Landlord also suggest that most of London has become 'unprofitable' for landlords over the past year

Unprofitable? The latest findings by CIA Landlord also suggest that most of London has become 'unprofitable' for landlords over the past year

Unprofitable? The latest findings by CIA Landlord also suggest that most of London has become ‘unprofitable’ for landlords over the past year

Barking, Brent, Newham, Westminster, Tower Hamlets and Southward were the only six ‘profitable’ locations. 

Tellingly, areas closer to central London are becoming increasingly unprofitable as more and more Londoners move away from city rentals, CIA Landlord said. 

The high-end borough of Kensington and Chelsea could see landlords facing a loss of over £2,000 a month, against profits of £1,735.28 at the same point a year ago.  

How were the rankings calculated? 

The rankings by CIA Landlords have been calculated by examining average licence fees, property prices, maintenance costs, income from tenants and relevant mortgage repayment costs. 

As with any research like this, costs can vary widely according to property type and location, but these findings give a general idea of what prospective landlords can expect to generate and fork out this year.

The average monthly landlord costs have been calculated by taking the average monthly sum of tenancy deposits, landlord insurance, appliance costs, furniture costs, gas safety certificates, energy performance certificates, license fee costs and national insurance deductions.

Monthly profit figures have been calculated by taking the sum of the average rent and deducting the monthly mortgage costs and other required fees.   

Tenant eviction ban until end of March 

Last month, the Government extended the tenant eviction ban until at least the end of March. 

The tenant evictions ban was introduced at the start of the coronavirus outbreak and was designed to protect tenants who have been hit by a loss of income. At the same time, mortgage payment holidays were also introduced for landlords. 

The Government briefly lifted the eviction ban in September, before reintroducing it at the end of last year, and it will now run until the spring. 

On top of that, landlords still need to give tenants a six month notice period until at least 31 March. 

The only exceptions for the notice period and evictions ban are the most serious cases. This includes anti-social behaviour and extreme rent arrears, equivalent to around six months’ worth of rent.

This post first appeared on Dailymail.co.uk

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