Buy-to-let Property Boom ‘pushing London rents higher’

Reports in last weekend’s Financial Times have highlighted the surge in new buy-to-let purchases,with many areas in London likely to be the first to benefit, according to property search consultant Expatfindaproperty.com.

According to the Financial Times report, landlords are taking advantage of weaker house prices to snap up bargain rental prospects in premier locations. While some are cash purchasers, others are using cheap borrowing costs to expand their portfolios.

Expatfindaproperty.com’s own research suggests that rental yields in many parts of London, in particular, are starting to rise steeply, following many years of static, or only gently-rising, prices. In particular, demand for rental homes near to prime commuting transport links, such as those in the Clapham, Earlsfield, Wimbledon and Raynes Park areas of South West London, has seen agents arranging block viewings, with would-be tenants forced to bid against each other to secure a property.

Emboldened by the strength of the demand, says Expatfindaproperty, agents and landlords are now pushing rents higher, which means that new landlords can expect enhanced returns, as well as realistic prospects of capital growth, when capital prices eventually start to recover. Prospective tenants, however, will find this news less welcome.

Erica Evans, of Expatfindaproperty.com, comments, “Our straw poll of agents in South West London has revealed high levels of optimism for landlords. For those thinking of entering the market from abroad, providing they have a 30% deposit for an expatriate or international mortgage, now is an excellent time to be looking at the market, but location is absolutely critical.

“Strong rental yields are only available in quite specific areas around commuter infrastructure hotspots.”


Prime property for sale in London will see modest growth over the next year, as predictions show that the value of houses in the capital will continue to edge up, defying the economic crisis once again.

At the end of December, the Land Registry reported that prices for London property had risen again in November. It also said that the only region in the whole of England and Wales which had seen a rise in property prices over the whole of 2011 was London, with an increase of 1.4 per cent.

Lucian Cook, director of residential research at Savills, said that this trend was most likely to increase slightly in 2012, as property will see a further modest level of growth throughout thw next 12 months.

"We are forecasting in prime central London that we will actually see some very modest growth in the market. That is largely on the back of a continuation of overseas wealth coming into those markets," he noted.