Kensington and Chelsea is the most profitable borough in London, with landlords set to make a net profit of £1.1m over 25 years, according to a study from mortgage lender Kent Reliance.
Westminster is the second most profitable for landlords, according to the analysis, with a net profit of £993,000, followed by Camden at £867,000.
The study also found that across the London rental market, the typical landlord in the capital will see an estimated net profit of nearly £505,000 per property over the next 25 years through rental income and capital gains.
| Local authority / Unitary Authority | Initial rental income pa | Total rental income | Total Capital Gains | Total Costs | Total Profit | Profit in Today’s Money |
|---|---|---|---|---|---|---|
| Kensington and Chelsea | £48,613 | £1,772,409 | £1,444,410 | £2,116,090 | £1,100,729 | £670,928 |
| Westminster | £40,757 | £1,485,980 | £1,210,987 | £1,703,380 | £993,587 | £605,622 |
| Camden | £33,592 | £1,224,754 | £998,104 | £1,355,616 | £867,242 | £528,611 |
| Hammersmith and Fulham | £30,882 | £1,125,939 | £917,575 | £1,245,489 | £798,025 | £486,421 |
| Richmond upon Thames | £26,802 | £977,177 | £796,342 | £1,079,697 | £693,822 | £422,906 |
| Islington | £26,622 | £970,609 | £790,990 | £1,072,378 | £689,221 | £420,102 |
| Wandsworth | £24,289 | £885,556 | £721,676 | £977,588 | £629,644 | £383,788 |
| Hackney | £22,073 | £804,749 | £655,824 | £887,531 | £573,042 | £349,287 |
| Barnet | £22,062 | £804,361 | £655,508 | £887,098 | £572,770 | £349,121 |
| Haringey | £21,519 | £784,584 | £639,391 | £865,058 | £558,917 | £340,677 |
London’s rental income is nearly twice the national average of £162,000, the study found. Profits from rents in the capital are also more than double the next most lucrative region in the country, the east of England.
The research also factors in an opportunity cost of over £73,000, the return an investor could have made from long-term savings instead.
John Eastgate, sales and marketing director at Kent Reliance’s parent group Onesavings Bank, said: “The buy to let market is undergoing a sea change.
“Regulatory and taxation changes have altered the market dynamic, reducing its attractiveness to amateur landlords, and increasing the tax bills of higher-rate investors.
“In spite of rising costs, there are still healthy returns to be found in property for committed investors.”
Source: City A.M.