Landlords say London is best for investment

Friday 4th May 2012

Nearly half (46%) of existing property investors in London are considering purchasing additional rental assets in the City over the coming 12 months.
 
A report from the property investment specialists Young Group says there is strengthening investment appetite throughout the UK, but London assets are the most appealing.
 
Among those not actively considering investing in the London market, the reasons given were overwhelmingly finance-related, rather than reflecting a lack of confidence in the market.  

This was not the case when investors were asked about investing in additional property assets outside of the capital, where concerns over future tenant demand and capital value prospects topped investors’ worries.
 
Respondents believe that prospects for capital growth and rental income in London outshine those across the rest of the UK.
 
Property values in London are expected to increase by an average of 2.2% over the next year, whereas investors predict that values across the rest of the UK will fall by 0.4% over the same period.
 
The proportion of investors predicting rent rises in London has increased to 92%, but outside London, only 70% of investors expecting rental income to increase.

Average rents across London are predicted to rise by 3.25% over the coming 12 months (up from the 2.39% forecast in Young’s report of Q4 2011), whereas investors expect rental income for the rest of the UK to remain largely unchanged (+0.7%).
 
Neil Young, CEO of Young Group, said: “Investors appear more committed to the private rented sector than ever: a full 100% of respondents indicated that they have no intention of liquidating their assets over the coming 12 months.”