Property investors need to go Dutch to find the best buy to let yields in Europe, according to new research.
The survey was looking at property investment alternatives for British landlords who face a crackdown on taxes that will make their businesses less profitable.
Besides a 3% stamp duty surcharge on buying a second home or home to rent out, wealthier landlords also face income tax hikes over the three years.
The Netherlands had the best return on investment at 6.57% for city property and 6.78% for homes outside city centres, when the research was carried out in April 2016.
Investors should expect to pay around £110,000 there for a one room studio apartment and £211,000 for a three-bedroomed house.
Britain near bottom of EU buy to let league
The average UK buy to let yield was 4.28% – 21st of the 29 European Union states.
In Britain, a one bedroomed studio flat costs around £179,000 and a three bedroomed house comes in at £343,000.
Belgium and Portugal took second and third places in the buy to let table.
Brussels returns high rents mainly due to the many expats who live in and around the city who work for the European Union and related organisations.
Turkey also scored high for non-city centre yields.
The report, by foreign currency transfer firm World First, also pointed out that exchange rates also affected the cost of property investments for British buyers.
Avoid popular expat destinations
The weak Pound has seen Eurozone home values surge by 11% in 12 months.
“The message for property investors is to look beyond the shackles of the UK for better returns,” said World First market analyst Edward Hardy.
“The Netherlands has more affordable prices and better yields than the UK, while regulation controlling rents in Sweden and Germany reduce the returns for investors. Expat destinations are not the best places for property investment either.
“France, Italy and Spain all perform poorly for buy to let.”
Hardy also explained timing a foreign property purchase is also important.
“Choosing the right time to buy is critical.” he said. “Currency fluctuations have had a big impact on property prices and hitting the market at the right time can make a big difference to prices.”
