Investors: is now the time to invest in a buy-to-let property in London?
London rents soar as number of available rental properties dwindles
Rental demand outstripping supply, now could be a good time to invest in a London buy-to-let. But the market is complex, with some parts of the capital far more popular with tenants than others. Here, we take a look at the state of play for landlords considering investing in the capital, and reveal the most in-demand areas – as well as the places where rents are rising fastest.
Here, we take a look at the state of play for landlords considering investing in the capital, and reveal the most in-demand areas – as well as the places where rents are rising fastest.
House prices in London are falling If you’re looking to expand your property portfolio, the good news is that house prices in London are falling, although they’re still high in many areas. The most recent UK House Price Index from the Land Registry found that the average London property price dropped to £459,800 in February – a 3.8% year-on-year decrease. And landlords looking to invest in a flat or maisonette in the capital can take advantage of a more substantial 5.9% price fall.
And landlords looking to invest in a flat or maisonette in the capital can take advantage of a more substantial 5.9% price fall.
Cost of renting in London on the rise As house prices drop, the average ‘asking rent’ (the amount that’s advertised, before any negotiation) in the capital has soared by 8.2% year-on-year, according to Rightmove.
The property portal’s latest tracker puts the current average rent in London at £2,093 a month, representing the biggest annual rise since Rightmove started reporting the data in 2012.
The main factor for this is fewer properties coming on to the market, as some landlords have quit the sector following a series of regulatory changes eating into their profits – a trend that could continue with the upcoming tenant fees ban.
David Cox of the letting agent trade body Arla Propertymark claims the banning of these fees, coupled with uncertainty around the abolition of section 21 evictions, ‘could increase pressure on the sector and discourage new landlords from investing, meaning rents will only continue to rise for tenants’.