Buy To Let - Is it worth it in Burnley?

Is ‘Buy To Let’ still worth it in Burnley?

If you're on the lookout for your next lucrative investment, you might be eyeing up the buy-to-let market. In years gone by this has been a popular way to invest money and see a great return. But with so many towns and cities to choose from, where should you focus your attention? Today, we're zooming in on Burnley, a town that boasts a rich industrial history, vibrant community, and—most importantly—potentially profitable property opportunities.

Burnley has often been overlooked in favor of bigger northern powerhouses, but this Lancashire gem has been quietly transforming itself. From its affordable house prices to its strategic location within commuting distance to both Manchester and Leeds, Burnley is steadily catching the eye of insightful investors. Burnley itself has a bustling community spirit, with plenty of work opportunities, great transport links, the University campus and college, a general teaching hospital and many industrial estates offering work oppurtunities, great parks and nature reserves, with a combination of modern and historic buildings.

Now we want to look into, whether "buy to let" is still worth it, how can we find the answer? Well this can be evaluated by considering several key factors: property prices, rental yields, local economy, and potential risks. Let’s take it step by step and afterwards we’ll tell you how E&M Property Solutions can help you further. 

Property Prices

Burnley has relatively low property prices compared to the national average. As of 2023, the average property price in Burnley is approximately £100,000. This affordability can make initial investments more accessible to a greater number of people.

https://eandmps.com/property-for-sale - take a look at some of the properties we have up for sale at the moment!

Rental Yields

Rental yields in Burnley are among the highest in the UK. As of the latest data, the average rental yield in Burnley can range from 7% to 9%. This is considerably higher than the UK average of around 3% to 4%. High yields result from low property prices coupled with decent rental demand.

Take a look at this example calculation

Example Calculation:

- Purchase Price: £100,000

- Annual Rent: £8,000

- Gross Yield: (Annual Rent / Purchase Price) x 100 = percentage

(8000/100000) x100 = 8%

That's a fantastic return, and here at E&M Property Solutions there is a constant demand, especially for single let family homes! Why not use our free Rental Yeild calculator on our website for a more in depth calculation including legal fees, decorating fees added costs etc so there's no hidden downfalls!

https://eandmps.com/rental-yield-calculator

Local Economy and Employment

Burnley has seen economic improvements, including the regeneration of the town centre and investments in education and employment. The local economy, bolstered by sectors like manufacturing and services, provides a stable employment base which is crucial for tenant reliability.

Tenant Demand

Student Population: Burnley has a growing student population due to the University of Central Lancashire (UCLan) campus, which can provide a steady flow of tenants.

Professional Tenants: The town attracts professionals working locally or commuting to nearby cities like Manchester, given its relatively lower living costs.

Families: Great schools and local attractions draw families into the area, and family properties are in high demand.

Risks and Considerations

Property Condition:Older properties might require significant renovation, impacting initial investment and returns. Usually these are the properties that investors like due to being lower in price, but ensuring you have a great renovation team to support this is crucial.

Market Fluctuations: While property prices in Burnley have been stable, potential investors should be mindful of economic changes that could affect property values and demand.

Management Costs: Factor in management fees, depending on whether you plan to self-manage or use an agent, which could be around 10%-15% of monthly rent.

Regulations and Taxes

Stamp Duty Land Tax (SDLT): Consider the additional 3% SDLT surcharge on buy-to-let properties.

Mortgage Interest Relief: The phased reduction in mortgage interest relief can impact net profitability. Since April 2020, landlords can only claim a 20% tax credit on mortgage interest payments.

Licensing Requirements: Be aware of any mandatory licensing for rental properties in Burnley, which may include costs and compliance requisites.

Is Buy-to-Let Worth It?

Yes, buy-to-let in Burnley can definitely still be a worthwhile investment, due to high rental yields and relatively low entry costs. However, potential investors should conduct thorough due diligence, considering all costs, potential rental income, and market trends. Engaging with local property experts and conducting property inspections are advisable steps.

Enter E&M Property Solutions, Burnley’s number one property management Company. We wrap everything up in a neat little package for you. From sourcing the perfect property to suit your budget, whether that’s on market or off market using our vast connections. Of course we are a thriving estate agency, so can handle the sale side of things for you. We can talk you through your options of what type of lettings your property would best suit, whether that’s is Single, HMO, Commercial or Holiday Let. We then have our partner construction company TEC NorthWest which can make any renovations your property needs to be up to standard and code.

The E&M Property’s Solutions team then offer the best lettings management service in Burnley, winning Gold for lettings in 2023/2024 from the British Property Awards. As part of our management service we offer inspections, cleanings and an up to date user friendly app so you know exactly what’s happening, when and why within your property investment.

So yes, E&M Property Solutions highly recommend Buy to Let Investments in Burnley and yes we will help you every step of the way!