There has been increased demand for buy-to-let in prime
central London in recent months, and this trend looks set to continue in 2019,
as rental yields improve, according to Black Brick.
The independent buying agency points to the latest
data released by Knight Frank, which shows that rental yields in prime
central London are currently at a six-year high – an attractive proposition for
The average rental yield in prime central London in December
was 3.35% – the highest level recorded since April 2012 – as a result of rising
rents and downwards pressure on prices, reports Knight Frank.
The property firm found that lettings activity across prime
London markets has remained firm, despite the current uncertain political
backdrop, with the number of new tenancies in November increasing by 12.3% on
the previous year.
Knight Frank’s report shows that the average rental yield in
prime central London increased by 1.1% in December, in response to falling
levels of supply, prompted by landlords seeking to sell their properties in
response to recent tax reforms.
But, while supply continues to decline, the number of new
prospective tenants registering in prime central London has been on an upwards
trajectory since the start of the year, suggesting that rents will rise further
There has been similar upwards pressure on yields in prime
outer London, as rent price decreases bottom out. An average gross yield of
3.5% in December was the highest recorded since March 2015.
Caspar Harvard-Walls, a Partner at Black Brick, comments: “We are seeing
something of a resurgence in buy-to-let enquiries compared with a year ago, and
we are sourcing deals offering yields between 4-5%.”
he adds that, with reductions in mortgage interest
tax relief, such investments are considerably more attractive to landlords
who can buy mostly or entirely with cash.
rents set to rise perhaps 15% over the next five years, this part of the
market should see a bounce,” Harvard-Walls concludes.