Although changes to the tax system were in 2016 dampened the mood for property investing, the Covid pandemic and resulting lockdowns and lifting of stamp duty increased the amount of homes being bought and sold. In tandem, the demand for lettings increased. This was largely due to emergence and rise of hybrid working and the reassessment of living and working habits by a vast number of people.
So far 43,000 homes have been purchased in 2022, indicating a strong market for buying and renting out. In light of this, here are the results of a £25k and a £50k lump sum delivering value for money in each area.
Merthyr Tydfil & Blaenau Gwent:
According to Hamptons, the average property in this area of South Wales provides on average 10.5% yield annually. Combined mortgage, stamp duty and maintennance costs are on average £15.5k for an apartment and for just over £25k, an average terraced house. £5k per year in net revenue for renting out a flat, increasing to £8k per year with a terraced house.
Investors in this region can expect rental income of £5.2k per year from a flat and £7.1k from a house. A typical flat costs £73,150, so covering the deposit and stamp duty together would cost £20,480. A £25,000 budget will price landlords out of the market for the average terraced house, which requires just over £26,000 for the deposit and stamp duty combined.
A cheaper entry point, £5.2k per year total for a flat and £7.1k per year from the averaged terraced house. The annual yield is just over 10%, costing £19k for the desposit and stamp duty for a flat, and just over £26k for a small house.
One More Thing:
Reddbox has just launched new insurance plans, allowing you to secure nine months of rent upfront, take out home insurance and as a free additional gift , insure electronic devices under the gadget insurance plan. You can still hire tradesmen and store documents all in the app, and let Reddbox calculate the figures for you, in time for the Making Tax Digital mandate.
Our offer: Download the app and start saving time managing your properties. Follow the screens to provide your details, and that’s it. Some of the key features why you should consider Reddbox are –
- A completely app-based, super simple service booking process.
- Options to pay for the service over a few months without any additional interest or fee. See our rates here. Be quick, we are running promotional rates at the moment.
- You can book the service seven days a week, which means no need to disrupt your busy day.
- A very transparent cancellation and refund policy.
- And the best one – Reddbox will automatically organise all the relevant documents such as invoices and certificates.