Tenant demand in Central London falls and landlords are looking for greener pastures
Demand for rental property from tenants in the Central London PRS is falling, but it comes at a time when fewer landlords are looking to operate in the area long term anyway, according to new reports, which suggest that yields are now better away from the capital.
According to the data from the National Landlords Association (NLA), in the past 12 months, the number of landlords in this region who said they are going to invest in more properties in the year ahead has fallen from 15 per cent to just five per cent.
This also means that Central London now has the lowest volume of investors who intend to buy more homes in the coming years when compared to the rest of the UK, which would suggest that London-based buyers are looking to purchase in areas where there are better yields.
For some time, regional hotspots where there are more students and increasing business prospects, such as Manchester, Liverpool, Birmingham and Leeds, are delivering far higher PRS yields than traditional areas such as London.
Another reason for many landlords being driven away from the capital is the simple fact that fewer tenants are now looking for rental properties in key central areas. Better transport links have meant more moving out to suburban London and surrounding counties, where commuter prospects have improved greatly in recent years, and the cost of living is far lower.
"For many tenants the practical solution of moving out of the city to more affordable suburbs with good transport links is becoming increasingly appealing," she pointed out.
"In turn, it seems that landlords have been quick to respond, turning their backs on the capital and looking to other areas where the upfront cost of acquiring property is lower, and the potential yields to be had are higher," she added.