A new study by CIA Landlord reveals the London boroughs with the cheapest average house prices vs. the average rental cost to uncover the most profitable hotspots to invest in before stamp duty holiday ends in March 2021.
For those living in London, buying a property can seem like an extremely unattainable dream with the average price tag for a home in the capital commonly topping the million-pound mark. However, with remote working taking over the capital, there are actually 13 boroughs where average houses prices fall below the ยฃ500,000 mark, allowing for an attractive pot of stamp duty savings too, within an area that is a perfect commutable distance into the city.
The study revealed that Havering was the best borough for profitability, with house prices averaging at ยฃ395,832 and monthly rental prices reaching a high ยฃ1,895. Under the stamp duty holiday, you can also expect to save more than ยฃ9,000 when buying the property!
Newham, Barking & Dagenham and Enfield follow Havering, with house prices averaging between ยฃ300k-ยฃ400k. With the average monthly rent price for all the top London boroughs surpassing ยฃ1,000 per month, landlords in the capital that look to invest further out of zones 1-3 will certainly reap the rewards.
The top London boroughs for landlords Buying-to-Let
Rank | Borough | Average house price (ยฃ) | Average monthly rent price (ยฃ) | Stamp duty saving (ยฃ) | Profitability /10 |
1 | Havering | ยฃ395,832 | ยฃ1,895 | ยฃ9,792 | 6.40 |
2 | Newham | ยฃ354,705 | ยฃ1,531 | ยฃ7,735 | 5.92 |
3 | Barking & Dagenham | ยฃ302,060 | ยฃ1,353 | ยฃ5,103 | 5.77 |
4 | Enfield | ยฃ399,517 | ยฃ1,362 | ยฃ9,976 | 5.55 |
5 | Lewisham | ยฃ439,831 | ยฃ1,420 | ยฃ11,992 | 5.54 |
6 | Hounslow | ยฃ401,178 | ยฃ1,348 | ยฃ10,058 | 5.52 |
7 | Waltham Forest | ยฃ465,099 | ยฃ1,415 | ยฃ13,255 | 5.47 |
8 | Bexley | ยฃ368,483 | ยฃ1,265 | ยฃ8,424 | 5.47 |
9 | Harrow | ยฃ467,861 | ยฃ1,389 | ยฃ13,393 | 5.42 |
10 | Redbridge | ยฃ455,417 | ยฃ1,359 | ยฃ12,771 | 5.41 |
11 | Croydon | ยฃ357,195 | ยฃ1,190 | ยฃ7,860 | 5.38 |
12 | Hillingdon | ยฃ478,917 | ยฃ1,332 | ยฃ13,946 | 5.31 |
13 | Sutton | ยฃ466,926 | ยฃ1,181 | ยฃ13,346 | 5.10 |
Kensington and Chelsea ranks as the least sensible Buy-to-Let hotspot for Stamp Duty savings
With average house prices reaching over ยฃ2m, Kensington and Chelsea (5.46 out of 10) ranks as the least sensible buy-to-let hotspot amongst the current stamp duty holiday. Whilst just as profitable as Bexley (5.47 out of 10) or Waltham Forest (also 5.47 out of 10) why not avoid the hefty price tag and opt for a borough that returns the exact same in proportional investment at just a fraction of the price?
Bromley, Haringey and Ealing follow as the second, third and fourth-least business-savvy options with the exact same profitability ROI as Barking & Dagenham (ยฃ302,060) or Enfield (ยฃ399,517).
This being said, if you a couple million spare to invest and are just looking for the most profitable borough disregarding stamp duty savings, Westminster, with a profitability score of 8.04 out of 10 is your best bet. This is followed by Southwark, Lambeth, Brent, Wandsworth, Hammersmith, Barnet and Camden, where no other borough below ยฃ500,000 comes near these areasโ return on investment margin (scores ranging from 6.56 to 8.04 out of 10).
The Least Sensible London Boroughs for Landlords Buying-to-Let Under Stamp Duty Holiday
Rank | Borough | Average cost of property (ยฃ) | Average monthly cost to rent (ยฃ) | Stamp Duty Savings | Profitability |
1 | Kensington and Chelsea | ยฃ2,143,009 | ยฃ4,003 | ยฃ15,000 | 5.46 |
2 | Bromley | ยฃ502,444 | ยฃ1,280 | ยฃ15,000 | 5.50 |
3 | Haringey | ยฃ617,581 | ยฃ1,638 | ยฃ15,000 | 5.77 |
4 | Ealing | ยฃ770,065 | ยฃ1,916 | ยฃ15,000 | 5.81 |
5 | Greenwich | ยฃ569,448 | ยฃ1,685 | ยฃ15,000 | 5.98 |
6 | Richmond Upon Thames | ยฃ913,850 | ยฃ2,291 | ยฃ15,000 | 6.03 |
7 | Kingston Upon Thames | ยฃ674,463 | ยฃ1,968 | ยฃ15,000 | 6.15 |
8 | Tower Hamlets | ยฃ541,143 | ยฃ1,803 | ยฃ15,000 | 6.25 |
9 | Merton | ยฃ598,216 | ยฃ1,919 | ยฃ15,000 | 6.28 |
10 | Islington | ยฃ807,693 | ยฃ2,320 | ยฃ15,000 | 6.37 |
11 | Hackney | ยฃ558,438 | ยฃ1,913 | ยฃ15,000 | 6.38 |
12 | Camden | ยฃ1,050,079 | ยฃ2,845 | ยฃ15,000 | 6.56 |
13 | Barnet | ยฃ628,281 | ยฃ2,183 | ยฃ15,000 | 6.63 |
14 | Hammersmith | ยฃ988,444 | ยฃ2,797 | ยฃ15,000 | 6.65 |
15 | Wandsworth | ยฃ770,060 | ยฃ2,484 | ยฃ15,000 | 6.74 |
16 | Brent | ยฃ509,812 | ยฃ2,105 | ยฃ15,000 | 6.83 |
17 | Lambeth | ยฃ720,226 | ยฃ2,469 | ยฃ15,000 | 6.85 |
18 | Southwark | ยฃ762,437 | ยฃ2,983 | ยฃ15,000 | 7.57 |
19 | Westminster | ยฃ1,217,229 | ยฃ4,029 | ยฃ15,000 | 8.04 |
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