Buy-to-let – is it better to invest in an £80,000 or a £250,000 property?

By Scott Dawson Advertising

20 Feb 2023

Buy To Let Blog

Local estate agent Pendle Hill Properties have witnessed a significant shift in buy-to-let property investment with an increase in investors purchasing new build properties.

Buy-to-let investors may more commonly be associated with purchasing cheaper properties with 54 per cent of buy-to-let properties in the UK being terraced houses (Source: BVA BDRC via Paragon Bank), but recent changes have seen buy-to-let landlords switching their attention towards new builds valued at £250,000 and above.

Research from the ‘English Private Landlord Survey’ found that 42 per cent of landlords became a landlord because they wanted to invest in property. A figure that comes as no surprise, with statistics from Uswitch showing that there are currently around 2.74million landlords in the UK.

The demand for buy-to-let investment is still high, but with the increase in new legislation and regulation, investors are starting to look at things a little bit differently.

From annual safety checks to landlord’s insurance and EPCs, the costs of being a landlord are not decreasing, so many buy-to-let landlords are looking at different ways in which they can make their investment more profitable.

Purchasing a new build property will offer a long-term investor a more hands off investment, due to fewer problems arising than an older property, while the warranties offered by new builds are also providing a very attractive proposition for investors. Not only that, but investors are also looking closely at location, which in the longer term will determine the capital growth.

A key shift in the investment, witnessed by Pendle Hill Properties, has seen more investors acquiring new builds to add to their buy-to-let portfolios. Not only are these properties brand new, but are often located in sought after areas, where demand is high, and where renters are willing to pay what is required to live there.

Moving away from terraced houses, and instead to new builds, is producing bigger returns for investors in the long term.

While a landlord may recuperate a higher percentage of their initial investment over a 10-year period when purchasing an £80,000 property, compared to a £250,000 new build, the increased costs of owning an older property and everything associated with that including maintenance and repairs, means opting for a new build buy-to-let is becoming more favourable.

For example, if an £80,000 property had annual rental income of £6,000 at a rental yield of 7.5 per cent, the investor would make £60,000 over a 10-year period.

If a £250,000 property had an annual rental income of £15,000 at a rental yield of 6 per cent, the investor would make £150,000 over a 10-year period.

While less sought after locations cost less and yield more, more sought after locations may cost more and yield less, but the appreciation they offer provides a more profitable opportunity for investors in the long term.

Rising property prices in more sought after areas can see your property increase in value year-on-year. Compare that to a terraced house in a much less sought after area and immediately, the return on investment is looking much more profitable on that £250,000 investment which you made 10 years ago.

Whether you are a landlord with a portfolio of one or ten, Pendle Hill Properties offer two comprehensive packages to help manage your properties. Their fully managed service includes everything from monthly rental collection to management of all maintenance issues, while their tenant finder service leaves you the landlord to have more control over the day-to-day tasks once your tenant has been found and the agreements signed.

To learn more contact the Pendle Hill Properties team by calling 01282 772 048 or by emailing [email protected]

For more information on Pendle Hill Properties, check out their website: www.pendlehillproperties.co.uk

Latest news

1

Construction begins on new Civil Service office building in Talbot Gateway Alan McBride Muse Will Town Defence Infrastructure Organisation Jennifer Chard Defence Business Services Cllr Lynn Williams Blackpool Council Garry Bowker Vinci

Construction begins on new Civil Service office building in Talbot Gateway

20 May 2025

2

Skiddle raises over £750,000 for charities Skiddle cheque presentation to Alder Hey Hospital

Skiddle raises over £750,000 for charities

20 May 2025

3

Former Victorian Hotel approved for residential conversion The site

Former Victorian Hotel approved for residential conversion

19 May 2025

4

REVOLUTION PARK: Work starts on Darwen’s new home of advanced manufacturing Oliver Webber, Tracy Clavell-Bate and Tim Webber from Barnfield Group with Cllr Phil Riley, second from right, Leader of Blackburn with Darwen Council

REVOLUTION PARK: Work starts on Darwen’s new home of advanced manufacturing

19 May 2025

5

Two Cuckoo Gins named winners in The Gin Guide Awards 2025 Mark Long

Two Cuckoo Gins named winners in The Gin Guide Awards 2025

19 May 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV122 May/June Launch Event
121 Lancashire Business View Magazine Launch
Networking
21 May 2025

LBV122 May/June Launch Event

Lancaster and Morecambe College, Lancaster, LA1 2TY

08:30 - 10:30

Sub36 Networking
Networking
11 Jun 2025

Sub36 Networking

British Jewellery School, Scorton, PR3 1BA

15:00 - 17:00

Lancashire Net Zero Carbon Conference
Net Zero Carbon Social 1200pxtrident 2
Networking
18 Jun 2025

Lancashire Net Zero Carbon Conference

Crow Wood Hotel & Spa Resort, Burnley, BB12 0RT

08:30 - 13:00

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
02 Apr 2025 - 08 Oct 2025

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 15:30

The Business Network Central & East Lancashire
LBV Hub Networking
22 May 2025 - 22 May 2025

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Preston Freelancer Meet-Up: May
Freelancer Meet-Up May.png.png
LBV Hub Networking
22 May 2025 - 22 May 2025

Preston Freelancer Meet-Up: May

society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Amber River True Bearing quarterly investment seminar
LBV Hub Seminars
22 May 2025 - 22 May 2025

Amber River True Bearing quarterly investment seminar

Cottons Hotel & Spa , Knutsford, WA16 0SU

16:00 - 18:00

Liverpool Business Expo 2025
https---cdn.evbuc.com-images-881365363-4862066883-1-original.20241023-085714.jpeg.jpg
LBV Hub Awards
23 May 2025 - 23 May 2025

Liverpool Business Expo 2025

Aintree Racecourse , Liverpool , L9 5AS

09:00 - 15:00

Advantage: AI – A Workshop for Business Leaders – May 29
Artboard 15.png.png
LBV Hub Seminars
29 May 2025 - 29 May 2025

Advantage: AI – A Workshop for Business Leaders – May 29

Door4 Office, Burnley Wharf, Manchester Road, Burnley, BB11 1JG

09:00 - 11:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV122 Online Graphic
Subscribe now

Weekly news bulletin