London buy-to-let returns reach 16.1%

For the UK as a whole returns reached 8.9% despite capital returns turning negative at -3.81% in the North East.

In the Capital income returns on buy-to-let property stood at 2.63% while capital returns reached 13.8%, says Ryan Bembridge

london buy to let returns reach 16.1%

London buy-to-let returns reach 16.1%

London buy-to-let returns stood at 16.1% in the year to February 2016 due to rising property prices, the Property Partner Residential Market Index has found.

In the Capital income returns stood at 2.63% while capital returns reached 13.8%.

For the UK as a whole returns reached 8.9% despite capital returns turning negative at -3.81% in the North East.

Rob Weaver, Property Partner’s director of investment, said: “Bricks and mortar continue to outperform stocks and shares which are far more volatile.

“London is still proving a beacon of strong performance with buy-to-let returns making landlords a healthy 16.1% year-on-year, mainly due to average house prices marching ever upwards.

“But the regional divide is widening. Our research shows the North East to be out of kilter with the rest of the country, looking particularly weak and plunging into negative territory once again – the fifth time in 12 months.

“By contrast, the North West of England saw strong growth, posting the best monthly return of any region. However, the story ahead for traditional buy-to-let landlords, could make uncomfortable reading when mortgage interest tax relief is gradually withdrawn and interest rates finally increase.”

London Buy-to-Let & Equity Release

What Is Equity Release?

Equity release is the use of financial arrangements that provide the owner of a house, or other property, with funds derived from the value of the property while enabling them to continue using it.

How Does Equity Release Work?

Equity release is aimed at homeowners aged 55 and over. It allows you to take some of the value of your home as cash.

Capital needed to start Equity Release

The maximum amount you can borrow with equity release is usually up to 60% of the value of your home according to Money Advice Service. The exact amount depends on your age, the value of your property, and the other factors mentioned above.

For example, if a 55 year old and 85 year old had the same property value, the 85 year old would be able to release more equity. This is illustrated in the table below.

Editorial Note: This content has been independently collected by the EveryInvestor advisor team and is offered on a non-advised basis. EveryInvestor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.
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