Rents in London continue to rise at a rapid rate, offering many benefits for investors looking to earn big returns on their money. According to Homelet, in the months leading up to October this year rental rates had risen by 7.5%, taking the average monthly price for a property to £1,560. Both of these figures are impressive when viewed alongside the averages for the whole of the UK in the same period; 3.5% and £749 respectively.
The rental gap between London and the rest of the UK is now the highest it has been since records began. The fact that it continues to increase can be traced to the continued rises in house prices. This is a double-edged sword. It means property owners need to charge more to cover their costs and also makes it difficult for buyers to be able to afford properties. This in turn results in more people looking to rent, causing higher demand and further rises.
London may be leading the way in the shift to renting, but it is not an isolated case. In fact, over the five years from 2007 to 2012 the number of people who own their home has fallen slightly, from 18.2 million to 17.8. Over the same period there has been a huge rise in private rentals, rising from 3.6 million to 4.9. It is expected that more up to date figures will point to a continued fall in ownership and rise in private renting.
The changing nature of how people choose to live, with many favouring renting rather than buying, has presented opportunities for landlords across the UK and in London in particular. Property owners in the capital can earn a good monthly income on their assets whilst also seeing them increase in value so they can provide a bigger return when the time comes to sell.
As well as looking at the figures, Homelet also asked people what the most important factor is when they look for a home to rent. They found that price is far and away the leading consideration, beating location, security and the distance from work and leisure. This is important for prospective investors to know so they can create a suitable plan. As the experts in property and estate management covering Haringey and the rest of London, we can help you to plan for the future of your investments.