Total returns approach 15% for buy-to-let

ludlowthompson’s buy-to-let review for the fourth quarter of 2014 makes heartening reading for London’s buy-to-let investors and landlords.

The key findings include:

• Average net annual returns in London’s high-yielding buy-to-let areas were 14.6% in Q4 2013, up from 10.6% in Q3 2013 and 10% in Q4 2012
• Average monthly rents in these areas were £1,679 in Q4 2013, down 7.6% on Q3 2013, but up 4% on Q4 2012
• The average void period on ludlowthompson properties was just 4 days in Q4 2013, down from 10 days in Q3
• The annual rate of capital growth in London was 10.6% in November 2013

Stephen Ludlow, Chairman of ludlowthompson, comments: “The effects of the improving economy can clearly be seen in rising year-on-year rents in London. A big driver of this is young professionals benefitting from the improving jobs markets and moving out of their parents’ homes or house shares.

“London property continues to deliver markedly better capital returns to investors than property in other parts of the country. The structural shortage of homes in London, combined with population growth and inward economic migration to the capital means there’s a very good chance this trend will continue over the coming years.

“Our quarterly buy-to-let review is a vital tool for existing and prospective buy-to-let investors and landlords to stay informed about the state of the market, and make sure they are well-positioned to benefit from the growth and returns on offer.”