The property market is booming all over the country, but house prices in London are particularly buoyant as wealthy foreign investors move fast to snap up available properties in prime locations. In fact demand for homes in some of the capital’s most expensive boroughs is so high that nearly 60% of properties listed as £5million and above are being sold to overseas buyers, which experts warn could lead to a property bubble.
Buy to Let Boom Boosting Property Prices
Lenders have handed out more than £5billion to landlords between April and June. Demand for rental properties in the capital is pushing up house prices even further, but rental yields are lower as a result. In some parts of the country landlords can enjoy around 6% whereas in London the rental yield is less than 4%.
Buy to Let Lending Increases
Figures recently released indicate that lending to landlords has increased by a fifth in the period between April and June, but it does include re-mortgages taken up by landlords looking to take advantage of low interest rate deals available. Experts say that the buy to let market is now stronger than 2008, but not quite as high as the summer of 2007.
Savers Being Penalised
With interest rates so low right now, keeping your nest egg in a savings account just doesn’t make sense any more. Buy to let, on the other hand, offers investors a good return on their money, hence the reason why so many people are snapping up investment properties and letting them out to eager tenants. But if you have your eye on the London rental market, you could find yourself priced out of the game.
