Since the recent changes in tax benefits for buy-to-let landlords there has been a significant drop in the amount of residential property investment in the London area, this past year.

Whilst London has seen the amount of investment drop, Manchester on the other hand has seen property investment on the increase and is gaining ground fast on London as the most attractive place for the UK’s buy-to-let landlords, according to new data from UK Finance.

According to UK Finance, landlord investment has dropped by over 50% since April 2016, when the government introduced stamp duty increase for buyers of second homes.

In the first quarter of this year there were just 1,126 mortgaged purchases by buy-to-let landlords in London, compared to an average of 2,500 in 2014 and 2015.

The London property market has been affected by Brexit, inflated house prices, and mortgage constraints. Rents are predicted to fall by between 1 and 2%, according to analysts Hometrack, meaning lower returns for buy-to-let investors.

Manchester was also affected by the tax hikes, but much less significantly. There were 840 mortgaged buy-to-let purchases there for the first three months of 2017, compared to an average of 1,000 in 2014 and 2015.

Manchester is experiencing a residential building boom, and is an attractive investment for landlords because it offers higher average yields than London. The market has been boosted by a growing student population and the BBC’s huge MediaCityUK development.

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