The coronavirus pandemic has had many unseen consequences. A year ago, we couldn’t have imagined that London would no longer be the hub of activity it once was. A shift towards remote working, increasing property prices and decreasing rental rates have had a significant impact on the buy-to-let market in the capital. According to CIA Landlord’s annual report, only 6 out of 33 London boroughs will prove profitable for landlords in 2021. It has taken a global pandemic to disrupt the order of things. The coronavirus pandemic has resulted in a seismic shift towards home working and a significant percentage of office workers want this to be the norm going forward. Now, many are starting to look outside of the capital for a place to live. As a result, London’s profitability for landlords has decreased by a whopping 48% since January 2020, according to CIA Landlord. However, landlords still need to pay their monthly mortgage costs, monthly fees for maintenance and letting agency fees, averaging £1,134 per month in 2021. But as Londoners move away from city rentals, the market is rapidly becoming unprofitable for buy-to-let investors. Coronavirus, the stamp duty holiday and fluctuating house prices have all led to uncertainty in the buy-to-let market. In reality, these changes have meant that location has become an even more important factor when choosing a buy-to-let property. Whereas central London used to offer the highest potential, the pandemic has meant that areas such as Brighton, Bangor, Portsmouth and Leeds are now the most profitable in the country.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of February 2021 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.