Buy-to-let investors could lose money in Warrington, Cambridge and Crawley

Buy-to-let landlords could make a loss when investing in Warrington, Cambridge and Crawley, according to analysis from agency and law firm Coulters.

The firm compared monthly mortgage costs (over a 35-year term to 80% LTV at 3.0%) to monthly rental prices across the UK. From there annual profits are converted into a percentage of the overall cost of a house to give the annual return on investment (ROI).

It concluded that investors in Warrington could lose -1.02% per year, where house prices average at £254,000 but the average rental price is just £566 per month.

Another bad area for investors is Cambridge (-0.86%), likely due to sky-high house prices in city, while landlords could lose money in Crawley (-0.50%), Poole (-0.40%) and Swindon (-0.36%).

Other areas to avoid are Reading (-0.32%), Doncaster (-0.18%), Perth (-0.17%), Luton (-0.15%) and Oxford (0.15%)

Preston the best area to invest

While many cities studied offered a positive return, it was Preston in Lancashire that topped the chart.

With house prices at around £176,000 and typical rents at £981, the city offers investors an annual return of £2.98% according to the study.

This gives landlords an estimated profit of £438 per month and £5,256 per year.

Other strong areas are Coventry (2.74%), Glasgow (2.67%) and Swansea (2.54%).

Notably Scottish cities are well represented in the top 10, with Glasgow, Dundee (2.47%) and Paisley (2.12%) all representing healthy spots to invest.

The average annual profit for a Scottish landlord is £1,909, with an average return on investment of 1.06%.

However those in England are averaging a loss of 227 per month and an average ROI of -0.06%.

Other notably good areas to invest are Manchester (2.14%), Leeds (1.90%), York (1.85%) and Stoke-on-Trent (1.73%)

Leave a Reply