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Winchester Landlords Suffer Worst Effects of Buy-to-Let Tax Changes
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Tax changes have taken their toll on Winchester, making it home to the most vulnerable rental market, according to new research from Gatehouse Bank.
The second home surcharge and reduction of mortgage interest relief are amongst such tax changes that have constrained the buy-to-let market in recent years. This has created a situation in which the yield of a property is no longer considered to be the primary focus in the private rental sector (PRS).
An analysis by Gatehouse Bank has found that Winchester is the area in which landlords are suffering the most, followed by Cambridge, Chichester, Warwick and Reading.
The study has looked at data concerning how long available rentals have been on the market, alongside the affordability ratio between average salaries and rents.
In contrast to this study, others have only taken into account data concerning yields. Such studies would currently identify Padstow, Bedford, Taunton, Shrewsbury and Salisbury as the least attractive areas for buy-to-let property investors. The Gatehouse Bank study took into account opinions from across 122 UK towns and cities. It found that these locations actually rank much higher, placing 49th, 100th, 95th, 40th and 78th respectively.
Top Ten Places Landlords Are Most Vulnerable
| Rank | City/ Town | Average Property Price | Average time on the market (days) | Annual Yield (%) | Rent as a % of Earnings |
| 1 | Winchester | £549,706 | 248 | 3.1 | 56.2 |
| 2 | Cambridge | £446,938 | 251 | 2.9 | 45.6 |
| 3 | Chichester | £413,343 | 269 | 3.3 | 45.8 |
| 4 | Warwick | £353,197 | 254 | 3.0 | 40.0 |
| 5 | Reading | £415,192 | 230 | 3.4 | 46.7 |
| 6 | Woking | £515,941 | 229 | 3.6 | 61.3 |
| 7 | Watford | £419,815 | 207 | 3.2 | 47.3 |
| 8 | Chelmsford | £375,346 | 224 | 3.2 | 42.8 |
| 9 | Oxford | £510,110 | 261 | 4.2 | 70.8 |
| 10 | Guildford | £571,279 | 202 | 3.6 | 69.4 |
Looking at the places where landlords are least vulnerable, areas in the North and Midlands came top. Bootle in Merseyside has been revealed to be the best location for rental property, followed by Inverness, Stoke-on-Trent, Barnsley and St Helens.
Top Ten Places Landlord Are Least Vulnerable
| Rank | City/ Town | Average Property Price | Average time on the market (days) | Annual yield (%) | Rent as a % of Earnings |
| 1 | Bootle, Merseyside | £100,527 | 183 | 5.6 | 22.3 |
| 2 | Inverness | £184,849 | 124 | 4.8 | 30.9 |
| 3 | Stoke-on-Trent | £145,904 | 147 | 4.2 | 22.6 |
| 4 | Barnsley | £136,497 | 168 | 4.3 | 22.3 |
| 5 | St Helens | £133,460 | 178 | 4.3 | 21.6 |
| 6 | Telford | £167,408 | 131 | 4.0 | 25.2 |
| 7 | Dundee | £154,714 | 169 | 4.3 | 23.3 |
| 8 | Oldham | £146,511 | 173 | 4.5 | 24.5 |
| 9 | Southport | £195,796 | 115 | 4.2 | 30.9 |
| 10 | Bolton | £154,710 | 173 | 4.7 | 27.3 |
The information regarding Winchester reveals that properties listed for rent have sat on the market for almost a third longer (248 days) than in Bootle (183 days). The average yield in Winchester is at 3.1%, compared to Bootle’s 5.6%.
Major cities in the UK ended up ranking in varying positions. Manchester came 34th, Glasgow 43rd and Birmingham ranked 75th. London – where high property prices famously shrink yields and deter landlords – ranked 89th.
Renters in Edinburgh and London pay the highest rent prices compared to earnings. The cities are ranked bottom at 121st and 122nd for this factor, with rents coming in at 73% and 92% of local average earnings respectively.
In contrast to this data, the North of England is home to the top three cities for affordability. Hartlepool, Darlington and Stockton-on-Tees make up the top three.
On average, the study has found that properties available to rent in the UK have been sitting on the market for 197 days. Meanwhile the typical yield is 4.6% and the average proportion of earnings to rent is 37%.
Charles Haresnape, CEO at Gatehouse Bank, which offers buy-to-let finance for landlords, 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.”
