The residential rent in London, one of the top global property hubs, continues to rise overcoming speculations of a downturn in the market. Latest research data showed that rents in London increased by 5.6 per cent in May 2018 when compared to the corresponding period last year.
This is an encouraging sign for investors, especially local and international buy-to-let investors, and landlords, who are planning to expand their residential portfolio. The average rent in the UK capital now stands at £1586 a month, according to the latest HomeLet Rental Index, which provides a unique insight into the UK’s private rented sector.
The average rent in London in May 2017 was £1,502, which increased to £1,588 in April 2018, and continued to maintain stability. This also indicates the rising demand for quality residential properties in the private rented sector in London.
Buoyed by the demand for rental properties, landlords in the UK, including London, intend to increase the rents in the coming months. A survey conducted by HomeLet revealed that 18 per cent of the landlords intended to raise the rent in the next 6 months while 18.7 per cent of landlords planned to increase the rent over the next 12 months. Another 15 per cent of the landlords intend to increase the rent after one year.
The index and average prices are produced using HomeLet’s mix adjusted rental index methodology. This helps to track the representative rental values over time, which factor in changes in the mix of property types and locations of rented properties.
The data shows that London is much ahead of the rest of the UK in rental growth. The average rents across the UK rose by 2.0 per cent in May 2018 when compared to the same month a year previously. The average monthly rent in the UK is now £919, way below that of London. When London is excluded, the average UK rental value was £763 in May 2018, and this was 1.3 per cent higher when compared to the corresponding period last year.
This clearly establishes London as the market leader in residential rental growth in the UK. Since June 2017, the rental growth in London has remained steady while peaking in August 2017 to reach £1609. Trends indicate that London rents are expected to cross the £1,600 mark this year considering the rising demand.
London residential properties are popular among the capital-based working professionals, international business community, students and travellers, contributing to the rental growth. This is the most appropriate time to invest in a buy-to-let property in London.
The capital’s residential schemes, such as, Bronze in Wandsworth and Greenview Court in West London, by Strawberry Star, have good potential for higher rental yield. If you are keen on acquiring a residential unit in these schemes, connect with our property advisers for more information.