The buy-to-let hotspots of the future
| Financial Guidance

The buy-to-let hotspots of the future

While the rules may have got tighter and tax breaks less generous, investing in a buy-to-let property can still provide decent returns. So, if you’re looking to buy an investment property, where should you buy?

Lower prices and higher yields in northern cities should mean landlords continue to make a profit, while those in London and the Southeast are set to lose out.

Considering the new tax rules and assuming a 2.5% rise in interest rates; Manchester is the place to future-proof your portfolio in 2020, with an average annual profit of £5,400. The top 20 safe havens are dominated by the North and the Midlands, while the 20 worst loss-makers are in the South and East, led by Cambridge which could see a loss of up to -£4000.

In London, the smart investors are jumping out of fashionable Islington and into in cheaper areas such as Barking and Dagenham. The worst affected area is set to be pricy Kensington and Chelsea, with an anticipated loss of -£13,368.

Once new tax rules hit in 2020, if interest rates rise by 2.5%, these places are set to yield gross annual profits of:

Manchester £5,439
Cardiff £3,940
Durham £3,928
Leeds £3,819
Loughborough £2,963
Bournemouth £2,882
Chelmsford £2,803
Nottingham £2,777
Oxford £2,733
Newcastle £2,656

London (excluding City)
Barking & Dagenham £2,231
Newham £1,427
Merton £621
Tower Hamlets £575
Havering £151

Cambridge -£3,988
Winchester -£3,683
Falmouth -£3,488
Salisbury -£3,127
Chichester -£2,749

Kensington & Chelsea -£13,368
Hammersmith & Fulham -£7,392
Haringey -£4,700
Islington -£4,348
Richmond -£3,623

Source: Property Partner, based on Zoopla average asking prices and rents

Back to articles