London rental supply highlights strong Buy-to-let fundamentals

How should buy-to-let investors view the news that the supply of rental property in London is well below the national average? 46% below in fact.

Far from being a cause for concern, this demonstrates the extremely strong fundamentals of the capital’s buy-to-let market – where demand for good quality rental properties is likely to remain high in the long term.

London has long been a top destination for students, professionals and families for its world-class universities, vibrant jobs market and exciting cultural and social scene. And looking ahead, its appeal to EU citizens looks likely to be untarnished, as a “London-leaning” Brexit looks ever more likely, now that the government has confirmed transition rights for those arriving after March 2019.

All the signs are that we are not building homes fast enough in the capital for the number of people who want to live here. So not only is buy-to-let property likely to remain a sound asset in itself, tenants are more likely to want the security of longer-term tenancies, reducing the likelihood of void periods.

What’s more, our research shows that tax breaks on BTL are still very much worth having, despite recent changes to the regime – we’ve shown that investors will still benefit from £16.7bn in relief even once the reforms are fully phased in.

Stephen Ludlow, Chairman at ludlowthompson, says: “The future looks bright for London buy-to-let. Supply may be well below demand but that just serves to highlight why London is a good investment prospect.”