Across the board, London residential landlords seem to have had a good year. To date we've seen robust rental growth as a result of strong demand and this looks set to continue.
In prime central London we've seen the strongest and most notable increase in tenant demand, this demand then rippling out across neighbouring boroughs. There has been a rise in the number overseas tenants either in full time employment with financial institutions or in London to study. Given their lack of a rental track record in the UK many of these tenants are paying landlords 6 or even 12 months rent up front in order to secure the accommodation they want.
Late summer is always a busy period in the letting industry but this August / September has seen some exceptional activity. On a number of occasions would be tenants have tried to out bid each other and this trend looks set to continue as good stock remains relatively low.
We've continued to buy a range of property on behalf of investors and this looks set to continue as appetite for good London property is robust. On a number of occasions we’ve been outbid where demand has led to offers being made in excess of asking prices. A premium is still required when bidding for good stock and the best are reliably sold within days of coming to the market.
This strong demand in both the rental and investor market has meant yields have kept pace with the increase in capital values. In some parts of central London yields have even started to push out a little.
General consensus is that both rents and capital values are set to continue rising over the next 2-3 years.