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 £500,000 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 £395,832 and monthly rental prices reaching a high £1,895. Under the stamp duty holiday, you can also expect to save more than £9,000 when buying the property!
Newham, Barking & Dagenham and Enfield follow Havering, with house prices averaging between £300k-£400k. With the average monthly rent price for all the top London boroughs surpassing £1,000 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 (£) | Average monthly rent price (£) | Stamp duty saving (£) | Profitability /10 |
1 | Havering | £395,832 | £1,895 | £9,792 | 6.40 |
2 | Newham | £354,705 | £1,531 | £7,735 | 5.92 |
3 | Barking & Dagenham | £302,060 | £1,353 | £5,103 | 5.77 |
4 | Enfield | £399,517 | £1,362 | £9,976 | 5.55 |
5 | Lewisham | £439,831 | £1,420 | £11,992 | 5.54 |
6 | Hounslow | £401,178 | £1,348 | £10,058 | 5.52 |
7 | Waltham Forest | £465,099 | £1,415 | £13,255 | 5.47 |
8 | Bexley | £368,483 | £1,265 | £8,424 | 5.47 |
9 | Harrow | £467,861 | £1,389 | £13,393 | 5.42 |
10 | Redbridge | £455,417 | £1,359 | £12,771 | 5.41 |
11 | Croydon | £357,195 | £1,190 | £7,860 | 5.38 |
12 | Hillingdon | £478,917 | £1,332 | £13,946 | 5.31 |
13 | Sutton | £466,926 | £1,181 | £13,346 | 5.10 |
Kensington and Chelsea ranks as the least sensible Buy-to-Let hotspot for Stamp Duty savings
With average house prices reaching over £2m, 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 (£302,060) or Enfield (£399,517).
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 £500,000 comes near these areas’ 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 (£) | Average monthly cost to rent (£) | Stamp Duty Savings | Profitability |
1 | Kensington and Chelsea | £2,143,009 | £4,003 | £15,000 | 5.46 |
2 | Bromley | £502,444 | £1,280 | £15,000 | 5.50 |
3 | Haringey | £617,581 | £1,638 | £15,000 | 5.77 |
4 | Ealing | £770,065 | £1,916 | £15,000 | 5.81 |
5 | Greenwich | £569,448 | £1,685 | £15,000 | 5.98 |
6 | Richmond Upon Thames | £913,850 | £2,291 | £15,000 | 6.03 |
7 | Kingston Upon Thames | £674,463 | £1,968 | £15,000 | 6.15 |
8 | Tower Hamlets | £541,143 | £1,803 | £15,000 | 6.25 |
9 | Merton | £598,216 | £1,919 | £15,000 | 6.28 |
10 | Islington | £807,693 | £2,320 | £15,000 | 6.37 |
11 | Hackney | £558,438 | £1,913 | £15,000 | 6.38 |
12 | Camden | £1,050,079 | £2,845 | £15,000 | 6.56 |
13 | Barnet | £628,281 | £2,183 | £15,000 | 6.63 |
14 | Hammersmith | £988,444 | £2,797 | £15,000 | 6.65 |
15 | Wandsworth | £770,060 | £2,484 | £15,000 | 6.74 |
16 | Brent | £509,812 | £2,105 | £15,000 | 6.83 |
17 | Lambeth | £720,226 | £2,469 | £15,000 | 6.85 |
18 | Southwark | £762,437 | £2,983 | £15,000 | 7.57 |
19 | Westminster | £1,217,229 | £4,029 | £15,000 | 8.04 |
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