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Rental returns in London have shot up in recent years. In central London, it’s now £700 per week to rent a one-bed flat, which is well beyond what most young people can afford. Further out, it is cheaper, but even £320 per week in Golders Green is unaffordable for young couple in minimum wage jobs. And, it has not been so rosy for landlords, either.
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Too Expensive to Buy in London
London is now one of the most expensive cities in the world to buy property. For landlords, this represents a problem. Capital gains have been high, but most properties are unaffordable to all but the wealthy. Now, even capital gains are not enough to make the London property market attractive to landlords.
Research carried out by the National Landlords Association has found that landlords are increasingly purchasing properties in the suburbs and up north. Only 5% of landlords operating in central London say they plan on investing in further properties. By contrast, the number of Yorkshire landlords planning on investing in more properties has shot up from 10% to 16%.
Better Rental Yields Up North
Locations such as Merseyside and Yorkshire now offer much better returns than the over-inflated property market in London. Demand for rental houses is high in the north, and because property prices are comparatively low, yields are also high.
Landlord investors are beginning to realise that the best profits are to be had in the north of England.
