Changes to tax have hampered the Buy to Let market in the South but for landlords in the North of England the figures still stack up.
Changes to stamp duty
With the last April’s changes to stamp duty tax, times are tough for buy-to-let investors.
Buy to let mortgage lenders are cutting the amount they will lend to landlords. The interest cover ratio has gone up from 125 per cent to 145 per cent making it harder to borrow still.
On top of these changes, the withdrawal of mortgage interest tax relief starting in April 2017, will reduce the profitability of being a landlord.
So why and, more importantly, where are investors still buying?
Investment outside of the capital continues at a pace. Lower property prices can garner generous yields even with the proposed changes.
Buy to let on Merseyside
If you are buying to let with a mortgage, Merseyside is a good place to start. For example, a property in Merseyside costing £110,000 – with an additional £4,400 payable in stamp duty – could generate a rental income of £6,800 a yield of 6.2 per cent.
So the message to landlords is to look north.
If you are thinking of purchasing a buy-to-let property in Merseyside, use a local solicitor with offices in Southport and Liverpool.