The cities where landlords most likely to make a LOSS...

An agency and law firm, Coulters, has produced a league table of where landlords are most likely to make a loss on their investment.

The firm emphasises that its figures are averages, so this does not mean that all landlords will be making a loss on their properties.

Coulters works out its ROI data by taking the average price of a house in each of 50 cities, and working out the mortgage repayments based on a 35-year term, 20 per cent deposit and three per cent interest rate.

By comparing the monthly repayment costs to the average monthly rental prices, it produces figures which it calls ‘annual profits’ and then converts this into a percentage of the overall cost of a house to give the ROI.

Although the north of England produces high ROI in most cases, the exception appears to be Warrington, which ranks as the worst city for landlords in terms of ROI. While the average house costs £254,189, the average rental price is just £566 pcm, making it a great place for renters, but a less lucrative city for landlords.

Most of the other cities in the ‘worst 10’ for landlords are perhaps more expected - Cambridge, Crawley, Poole, Swindon, Reading, Doncaster, Perth, Luton and Oxford.

Despite the presence of Warrington and Doncaster on the ‘worst’ list, Coulters states that the North is the place to invest in general - with the Lancashire city of Preston offering the best return on investment.

In that city the average home sells for £176,378 while the average rental price is £981 pcm. This gives landlords a profit of £438 per month and £5,256 per year, giving an ROI of 2.98 per cent.

The other cities in the best performing 10 area Coventry, Glasgow, Swansea, Dundee, Manchester, Paisley, Leeds, York and Stoke on Trent.

Here’s Coulters’ full list…

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

Robert Brown
07 August 2021 11:24 AM

Totally agree.

Also the average house sold tends to be better than the average house rented and would command more rent if actually rented out. There is no allowance made for maintenance or other on going costs which render the figures totally unrealistic. On the other hand most astute landlords will have smaller mortgage ratios and pay less than 2% currently, and own an appreciating asset, again making the figures unrealistic but in the opposite direction.

Finally, any capital repayments, if made at all, only affect cash flow and not profits.

All in all, a totally pointless and potentially misleading article!