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In an increasingly harsh landscape, including tax changes, such as the second home surcharge and the tapering of mortgage interest relief, interest rates rises, and increasing regulation costs, landlords' margins are being squeezed. Inevitably, some landlords will be more exposed, and therefore vulnerable, than others.New research from Gatehouse Bank shows the locations where landlords are most exposed, based on factors such as how long available rentals have been on the market, average yields, as well as the affordability ratio between salaries and rents.Winchester is home to the most vulnerable rental market as tax changes magnify the threats to landlords in a world in which yield is no longer king.Tax changes including the second home surcharge and tapering of mortgage interest relief have constrained the buy-to-let market in recent years, resulting in an environment where yield alone can no longer be the primary consideration.Gatehouse Bank’s analysis of a number of key landlord metrics1 finds that it is Winchester that offers landlords the hardest won gains followed by Cambridge, Chichester, Warwick and Reading.The study takes into account the second tier of economic indicators including how long available rentals have been on the market, as well as the affordability ratio between average salaries and rents.This is in contrast to studies that look solely at yield, which would currently identify Padstow, Bedford, Taunton, Shrewsbury and Salisbury as making up the least attractive buy-to-let hunting grounds. The Gatehouse Bank study, across 122 UK towns and cities, found these locations rank well above the bottom, placing 49th, 100th, 95th, 40th and 78th respectively.In worst placed Winchester, properties for rent have been sitting on the market for almost a third longer (248 days) than in favourable Bootle (183 days), where the average yield was 5.6% compared with Winchester’s 3.1%.Of the UK’s major cities, Manchester ranked 34th, Birmingham lay in 75th position, with Glasgow ranked 43rd. London - where high property prices famously shrink yields and deter landlords - ranked 89th.It won’t surprise renters in Edinburgh and London that they pay the highest rents compared to earnings. These cities came bottom (121st and 122nd) when ranking this indicator, with rents coming in at 73% and 92% of local average earnings respectively. Meanwhile Oxford (70.8%), Guildford (69.3%) and Brighton (66.6%) all fell into the bottom five.In contrast, the top three cities for affordability, all of which are based in the North of England, boast earnings-to-rent ratios that are three times less. Renters in Hartlepool, Darlington and Stockton-on-Tees make up the top three. Tenants in these areas can expect rents that are 17.5%, 19.6% and 19.9% of earnings respectively. The typical yield is 4.6% and the average proportion of earnings to rent is 37%.Charles Haresnape, CEO at Gatehouse Bank, commented:“What our research shows is that famous Northern hospitality is not a myth. It’s a great place not only to be a landlord but also to live, with cities in the North and the Midlands performing much better across all indicators.“Rental properties are let far quicker than in the South, which is no surprise when major cities like Liverpool and Manchester are within commuting distance of smaller towns like Bootle.“What’s really striking is that in the areas that performed best, rental rates were far more affordable and this correlation underscores the symbiotic relationship between renters and landlords in areas where their investments could be deemed safest.”SEE ALSO - How and where to find yield away from home?UP NEXT - High yield strategy - invest North or South?DON'T MISS - Which property type offers the best potential for yield?NOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Great to see the North doing well
it is true an every day family can afford to buy a family home here
if you have wealth and live in the north you can live in the best it has to offer
In the south east you would pay 20 times more to live there
So if you have the cash the North is the place to live
i can be on a lonely beach in 10mins and I can be in the heart of Northumberland in 20 mins
You can park in the city for 60p per hour and if you are wealthy you can have a fantastic life - it’s the best kept secret
We have no gang crime, folk have time to stop and talk, and ask directions from a Geordie and he will treat you as a friend
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
Won't the beach be lonely because it is always cold and rains a lot up North?
It’s been stunning here of late
but we northern folk are tough in lots of ways
no such thing as bad weather just wear the right clothes lol
Thankgod it rains up north.
I wouldn’t want to be in this position.
This article is 5 years old. So perhaps already drinking the good stuff.
Coming soon Investorsk8.com
Wisdom - an integration of knowledge, experience, and deep understanding that incorporates tolerance for the uncertainties of life as well as its ups and downs.
How horrible. I really don't like thinking about these things as I drink my tea.
Do not believe the rumors and the air is cleaner as well.
I agree, and with global warming homing in, the North will be the new Spain. The time to invest is now!!
Are they saying these rental properties have been available to let and have been empty for the number of days quoted?
Would there be a housing shortage if all those properties were let within thirty days?
I don't know where their figures are from because in Cambridge I've never had a property on the market for more than two weeks.
I suspect that the figures relate to the length of time taken to sell the property rather than to let it.