Unexpected comeback by a London landlord
Source of News: telegraph
After the lock down, a boom in rental prices and gazumping tenants has caused London yields to surge. This reverses the fortunes of southern England's buy–to-let investors .
In the wake of the tax crackdown, landlords have been moving to North for better yields over the years. A new wave of small-scale investors has rushed to get back in.
Hamptons estate agents data showed that six of the top twenty local authorities with the highest share of landlord buyers reside in the south. This is double the 2019 level.
Rents in London have increased faster than flat prices. The country's highest rise was in yields, which rose by 0.4 percentage points annually. Yields increased by 0.6 points in Lambeth and Lambeth respectively. They jumped by two points in Hackney.
Sean Moore, 61 manages five properties in the vicinity of London. Occupancy fell by 60% during the pandemic; but now things are back to normal. Moore stated that agents are calling him daily to ask if they have any additional properties as the demand is high.
London's rental yields increased by 0.4 percentage point in 2021
London's rental yields increased by 0.4 percentage point in 2021
Region-specific gross rental yields
Estate agents were rushing to help him sell a flat in Islington when he first listed it. Moore made the most of this property by renting it for £210 per monthly, more than the £1,500 asking cost.
Jeff Doble of Dexters estate agents said that "This summer has turned everything upside down." "We are absolutely overwhelmed by people looking for rent." Hackney is the epicenter of the rental resurgence, because it is so popular among young professionals who are returning home from lockdown.
Many have left the sector due to the pandemic that afflicted London landlords. LonRes data shows that August rental listings were 28 percent lower than the average for 2015-2019.
Savills' estate agents Daniel Parker said that the dynamics between supply and demand were absolutely insane. Renters in the City are calling up to get their deposits back. In Shoreditch, Clerkenwell, and elsewhere, the rental prices have bounced 20% since their pandemic low, which has pushed them 3pc above 2019.
These attractive yields have attracted back small-scale landlords who had lost their portfolios due to tax changes.
"We have a banker in his 40s who had sold his portfolio over four years. He is now buying again," stated Mr Parker. Another investor, who quit the market a decade back, just bought in Islington.
New landlords are also being attracted by the boom. "In Clerkenwell, Shoreditch, three properties were sold in the last few days to first-time investors in their thirtys," stated Mr Parker.
The desire to downsize and work from home is driving up demand for rental properties in the south of England. Richard Adamson from auction house Allsop said that "a number of investors follow the tenant demand for property further out."
The South was home to six of the top 20 hotspots so far for landlord buyers in 2021
The South of UK was home to six of the top 20 hotspots so far for landlord buyers in 2021 Share of landlord buyers: % End of interactive chart.
According to Hamptons, 27 percent of buyers in Southampton and Portsmouth were landlords, while 23 percent in Plymouth were tenants. Katie Mason of Connells' estate agents' office, Plymouth, stated that supply is not meeting demand. She said that she only has two rental properties available and both are fully booked for viewings.
This market is moving so quickly that the landlord has yet to purchase one of these homes. The seller is closing on the sale on Friday, and will market it Saturday.
Andrew Loudon of Morris Dibben Estate Agents in Portsmouth said that "properties we rented in 2019 at £750 per month now rent for £950."
15% of the 430 properties Morris Dibben’s Southsea office oversees are new landlord purchases for this year. Loudon added that although it would be higher, there are not enough properties for landlords to purchase.
