With stamp duty changes already having an impact on the prime market, the possible introduction of a mansion tax is also worrying buyers. This could leave owners struggling to offload properties, but there is a silver lining in the amount of long term growth that is predicted in the rental market.
Savills is forecasting prices to grow by up to 17% over the next five years as long as the mansion tax doesn’t get introduced. If it does the number could be less but an upward trend is still expected.
The reason the prime rental market is set to grow is the lack of supply that is expected. With stamp duty rises people will be looking further afield for investment properties, meaning fewer are available in popular areas like Chelsea and Kensington. Continued expansion of the technology and communications sectors means more people could be looking at the market and with lower availability this should lead to inflated prices.
The most desirable rental properties in the prime market are usually one or two bedroom apartments in central locations. These offer the most benefits because the tenants will be prioritising the location over the space. Professionals regularly take up these properties.
Larger prime properties are slightly less in demand, but still have the potential to make excellent profits. Demand for rentals with six or more bedrooms can be rather thin and people will be looking to get the right combination of location and space.
Medium sized prime rental properties often fare the best when they are located close to quality schools. People looking to rent them want something temporary whilst their children are studying so they have the ability to move when their education is finished. If you are looking to invest in these types of properties, it’s a good idea to take the time to look for those which are located near schools.
If you are looking at putting a prime property on the market make sure you do some homework first. It is very important that you get an idea of what level of interest there is in your area before you start the rental process. As a highly experienced lettings agent in Merton and the rest of London, we can help you to make the right decisions and optimise your success as a landlord in London’s often challenging rental market.