Improving yields mean that buy to let investment in London could become attractive again in 2019, according to an independent buying agency.
Black Brick report that the latest yield figures from Knight Frank showed average yields in prime central London reached 3.35% in December, compared with the 1.3% yield available from 10 year UK government bonds.
Caspar Harvard-Walls of Black Brick comments: “We are seeing something of a resurgence in buy to let enquiries compared with a year ago, and we are sourcing deals offering yields between 4 and 5%. With rents set to rise perhaps 15% over next 5 years, this part of the market should see a bounce.”
However, he adds that, with reductions in mortgage tax relief, such investments are considerably more attractive to landlords who can buy mostly or entirely with cash.
Harvard-Walls also forecasts that in the wider London property market it should also be another good year for dollar based buyers who are now taking advantage of a nearly 30% fall in sterling against the dollar over the last four years.
What is DealMakerz Prime?
In depth stories
Want to know the story behind Britain's latest property mogul? Why a company is going bust? Our coverage goes beyond run-of-the-mill news on key real estate issues.
High powered community
Our subscribers are made up of the most influential Founders and CEO's in UK property. Gain a competitive edge and get informed - read what they read.
Exclusive guest articles
Understand exactly what the most senior figures in UK property are thinking. Exclusive opinion articles from powerful real estate influencers that move markets.