The new 3% stamp duty on buy-to-let properties coming into force from next April will effectively redraw the map for investors seeking the best returns, says Countrywide.
“The effect of the new duty will be to effectively increase the price investors pay and hence reduce the yield they achieve. New landlords must do their sums more carefully to make sure returns on investment add up,” said Fionnualla Earley, Countrywide’s chief economist.
In research drawn up by Countrywide for the Sunday Times, the agency says its offices in the West Midlands sold 16.7% of their homes to buy to let investors – the largest proportion of any region in England.
But some individual cities, all outside of that region, saw much larger shares of their on-sale stock snapped up by investors – and those are likely to see their markets affected more significantly if the stamp duty surcharge deters buyers from next April.
In Leeds, for example, no fewer than 41% of all Countrywide’s sales in the year to October were to buy to let investors. In Southampton the proportion was 38% and at Harrow, north London, 35%. Plymouth and Calderdale followed on 34%.
“While the region with the highest proportion of investors is the West Midlands, the highest concentrations of investors are spread more widely across the country,” explained Earley.