Market conditions are swinging back into the favour of buy-to-let investors according to a new index – particularly in London.
The LSL Buy-to-Let Index has shown that the average rent in England and Wales has risen by 3.3 per cent over the last year. This is prompting many savers to consider investing in property, particularly as easy access saving accounts are paying just 0.78 per cent interest on average at the moment.
Lucian Cook, the residential research director at agents, Savills, said that there are variable yields in London but many areas are proving to be extremely lucrative. He explained, “Gross yields are around 4 per cent in prime markets such as City of Westminster and Kensington & Chelsea, increasing to 5 per cent in Wandsworth, 5.5 per cent in Brent, 6 per cent in Redbridge and exceeding 7 per cent in Barking and Dagenham.”
Lucy Morton, head of lettings at WA Ellis, told the Financial Times that buyers must also consider the type and size of a property for its rental potential. Morton stated, “One or two-bedroom flats are still a safe bet and will typically let within one week.”
In terms of professional and commercial investment properties, Houses in Multiple Occupation are currently seeing average annual gross yields of 10.5 per cent, while the figure stands at 8.2 per cent for semi-commercial properties.