Landlords sit tight in prime London

Landlords in London are re-letting their properties in greater numbers despite recent tax changes, as Tim Hyatt and Noel Flint from Knight Frank reveal.

Landlords sit tight in prime London

The number of London landlords who re-let their property increased last year despite the recent series of tax changes affecting the buy-to-let sector, Knight Frank data shows.

There was a 10.1% rise in the number of re-let properties in the year to August 2017 according to the analysis, which covered new tenancy agreements and excluded extension deals with existing tenants.

“We see no signs of an exit,” said Tim Hyatt, head of Knight Frank’s lettings division. “Buy-to-let investors typically hold properties for an average of 16 years and most professional investors will ensure their portfolio is able to weather such storms.”

Housing affordability remains a live political issue in the UK and recent changes affecting landlords include the reduction of tax relief on mortgage interest, the loss of the wear-and-tear allowance and a 3% stamp duty levy for buy-to-let investors.

However, a key reason landlords are not selling up is because they value the longer-term benefits of property ownership, said Noel Flint, head of London Residential Sales at Knight Frank.

“The reason we are not seeing many landlords come to the sales market is because they know there is nowhere else to put their money at the moment and they appreciate that property is a tangible asset that will always be income-producing.”

Despite growing speculation around an impending rate rise in the UK, interest rates are likely to remain ultra-low by historic standards in the medium term. Knight Frank said this means the yields on investments such as cash or government bonds will also remain low.

It said landlords are seeing average gross yields of 3.2% in prime central London.

 

Please remember, no news or research item is a recommendation or advice to buy. Every Investor is not responsible for accuracy and may not share the author’s views. If you are unsure of the suitability of any investment for your circumstances please contact an adviser. All investments can fall as well as rise in value so you could get back less than you invest and tax policies may change. 

 

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