Demand from tenants in the residential lettings market in London is possibly slowing down, with landlords looking outside of the city for greater yielding investment.
A report from the National Landlords Association revealed that the number of landlords reporting a rise in tenant demand during the final quarter of 2016 fell by nearly 30% points. This was in comparison to the same period 2015.
South East Rises
Findings from the report also show that 40% of landlords in the South East saw a rise in tenant demand during the period. This was the highest recorded in the UK, which, the NLA suggests, shows more tenants are looking outside of London for more affordable accommodation.
What’s more, the firm points out that the drop in rental demand in central London coincides with a more conservative approach from landlords looking to purchase in London during the coming months.
Just 5% of landlords operating in London said that they plan to purchase in the next three months, the lowest across all regions and down by 15% from one year ago.
In comparison, the number of landlords operating in the North East planning to purchase in the next three months has nearly doubled, from 10% in 2015 to 19% last year.
Landlords in Yorkshire have also expressed a desire to buy, up from 10% during 2015 to 16% in 2016.
Carolyn Uphill, chairman of the NLA, noted: ‘It looks like central London is simply becoming too expensive for most people, regardless of whether you want to buy, invest or rent.’
‘For many tenants the practical solution of moving out of the city to more affordable suburbs with good transport links is becoming increasingly appealing. 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,’ Uphill added.