90’s London was a vastly different place to live in, a place without Boris bikes, new builds or an expanding urban regeneration project. Now London is regarded as one of the world’s major cities with a 24 hour tube service and one of the largest and most varied job markets in the country.
However, these benefits come at a price and are reflected in the general cost of living; this could be the reason that London is nowhere to be seen in the UK’s best postcodes for letting houses.
What’s Behind London’s Letting Downturn?
Since 1990 the cost of a typical house in the capital has tripled, growing at a much faster rate than any other region in the country. Millennials, for many of whom home ownership has become a pipe dream, are becoming increasingly aware that property rental is an unavoidable fate if living in the city.
However, as affordability is stretched in London, more buyers are looking elsewhere in the country in regions where potential for capital growth is far more encouraging.
Where Are Buy-To-Let Landlords Going?
A recent study conducted by TotallyMoney has suggested that landlords are now in favour of purchasing properties in the North of England, especially Liverpool, as areas in the region offer far higher yields than properties in London or the South East.
The investigation examined over 500,000 properties that had been put online for sale in October 2017. Trends revealed a distinct geographical split between the North and South of Britain with northern regions performing considerably well in comparison to the south. This was made evident due to the fact no South Eastern post codes were included in the top 25 high-yield areas for investors and developers.
Outside London’s Property Bubble
As property values in London and the South East continue to stagnate, other large cities especially those in the North of England carry on building up sturdy amounts of price inflation. This great migration of buy-to-let landlords has also been aided by cheaper rent and increasing job opportunities for tenants and comparatively lower mortgage rates for prospective buyers.
Moreover, Hometrack’s UK Cities Index has shown slowing rates of capital growth in the capital with the current rate operating at 6.4%, down from 7.8% this time last year. Yield rates for investors in London have now been overtaken by northern cities where inflation is affecting more affordable properties and the property values are still appealing. Investors looking to expand on their existing portfolios should pay close attention to the north of the country.
Assistance with Letting in the Capital
Despite these figures London’s letting marketing is still booming! If you’re letting in the capital the we can be of assistance.
Assist offer property inventory services for landlords and agents who require the security of a robust inventory but lack the time to carry them out themselves.
Talk to us about how we can assist with your inventory reports leaving you free to ensure you are investing wisely and maintaining your portfolio size.