Bright Future Forecast for London Buy-to-Let
By: Rentals London
London is special in many ways. It is the biggest city in Europe covering 620 square miles with a population of just over 13, 000 people for every square mile. So it is no surprise that tenant demand is strong and consistent.
Investors are interested in the rental yields which average 6 percent annually with the rent increasing at 3 percent every year. This is mostly in a low inflation environment with a strong currency, and long-term predictions of good yield growth in rent-related investments becoming e more attractive.
In London, capital appreciation is profound with the housing index showing a 9 percent compounded growth per year over the past 17 years, even in the height of 2008-09 economic crisis.
After the credit crunch, the demand quadrupled over supply and drove rental growth despite a slender economic recovery. The meagre levels of residential building activity is not able to boost the supply of rental accommodation at a pace matching the demand, particularly in employment hot spots.
Friendly property Laws
London has a long-term track record of capital growth. Other factors embellishing London residential property are its entrenched property laws that protect landlords and backed by an array of property sector professionals such as solicitors, agents, property managers and lenders.
Overall the market perception is that buy-to-let is returning to favour. The number of private renters in London increased from 2.15 million in 2004 to 3.35 million in 2011. Homebuyers cannot afford to raise the deposit to buy a home as mortgage deals insist on a 25 per cent deposit or more. That is why prospective landlords hoping to profit from rising rental yields by acquiring a decent asset in BTL segment.
According a real estate analyst, South West London is an area with a proven history of strong rental demand and capital growth and sizzle all foreign investors.
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