The revival of the London market

Alex Timperley, 08 May 2019

For several years the London buy to let market has been in decline and many investors have chosen to either wait and see or refocus their portfolios elsewhere in the country. However, the market is now showing signs of recovery and this could be a good time for landlords to invest in London once again.

The latest figures from Rightmove show that a lack of available rental stock in London has pushed rents higher in the capital. The average rent in the capital now stands at £2,093 per month, an all-time high which represents quarterly growth of 2.9% and annual growth of 8.2%.

Commercial director and housing market analyst at Rightmove, Miles Shipside, said of the figures: “There was a temporary slowing and drop in rents in London when the second home stamp duty tax came in back in 2016 as so many investors bought properties before this came in, leading to a huge increase in rental choice. But the lack of new stock since that time has led to rents increasing again, and London renters are now faced with rents that are over 8% higher than this time last year.”

However, that is not the only good news for landlords considering an investment in London. At the same time rents are rising, house prices are still a long way down from their 2014 peak according to Winkworth. This creates the ideal situation for any landlord looking at the London market as there is the potential for both further rental growth and notable capital appreciation in the future.

Buyer demand in the capital has remained strong, particularly in Central London where an increase in registered applicants for London properties was recorded. This is indicative of confidence returning to the capital and should bode well for investors looking to grow their portfolios.

New data from Commercial Trust Limited confirms that London has regained its position as the leading region for buy to let business applications. The number of mortgage submissions in the capital rose 4% over Q1 2019, putting the city back above the South East as the largest individual market.

Andrew Turner, chief executive of Commercial Trust, notes that buyer hesitancy prompted by Brexit may be working in favour of investors looking for a bargain. “The effects of Brexit have been keenly felt in London and perhaps the stalling of house price growth has to some extent created a buyers’ market for buy-to-let,” said Turner.

He went on to say: “With Brexit now pushed back to later in the year, the combination of low interest rates, a wide variety of mortgage product choice, stalling house prices and soaring tenant demand, many investors are of a mind to invest in the private rental sector.”

The art of buy to let investing is based on investing in the right place at the right time, and for those looking at London this might well be it. It looks as if the tide is turning and this could be a great time for investors to get ahead of the game and make the most of a friendly-looking market.

Looking for you next investment in London? Have a look at our available opportunities today!


The revival of the London market

Alex Timperley, 08 May 2019

For several years the London buy to let market has been in decline and many investors have chosen to either wait and see or refocus their portfolios elsewhere in the country. However, the market is now showing signs of recovery and this could be a good time for landlords to invest in London once again.

The latest figures from Rightmove show that a lack of available rental stock in London has pushed rents higher in the capital. The average rent in the capital now stands at £2,093 per month, an all-time high which represents quarterly growth of 2.9% and annual growth of 8.2%.

Commercial director and housing market analyst at Rightmove, Miles Shipside, said of the figures: “There was a temporary slowing and drop in rents in London when the second home stamp duty tax came in back in 2016 as so many investors bought properties before this came in, leading to a huge increase in rental choice. But the lack of new stock since that time has led to rents increasing again, and London renters are now faced with rents that are over 8% higher than this time last year.”

However, that is not the only good news for landlords considering an investment in London. At the same time rents are rising, house prices are still a long way down from their 2014 peak according to Winkworth. This creates the ideal situation for any landlord looking at the London market as there is the potential for both further rental growth and notable capital appreciation in the future.

Buyer demand in the capital has remained strong, particularly in Central London where an increase in registered applicants for London properties was recorded. This is indicative of confidence returning to the capital and should bode well for investors looking to grow their portfolios.

New data from Commercial Trust Limited confirms that London has regained its position as the leading region for buy to let business applications. The number of mortgage submissions in the capital rose 4% over Q1 2019, putting the city back above the South East as the largest individual market.

Andrew Turner, chief executive of Commercial Trust, notes that buyer hesitancy prompted by Brexit may be working in favour of investors looking for a bargain. “The effects of Brexit have been keenly felt in London and perhaps the stalling of house price growth has to some extent created a buyers’ market for buy-to-let,” said Turner.

He went on to say: “With Brexit now pushed back to later in the year, the combination of low interest rates, a wide variety of mortgage product choice, stalling house prices and soaring tenant demand, many investors are of a mind to invest in the private rental sector.”

The art of buy to let investing is based on investing in the right place at the right time, and for those looking at London this might well be it. It looks as if the tide is turning and this could be a great time for investors to get ahead of the game and make the most of a friendly-looking market.

Looking for you next investment in London? Have a look at our available opportunities today!