The pressures and costs of living in the capital are persuading many tenants to look elsewhere to live as demand within the London rental market ‘slides’, it has been claimed.
According to the National Landlords Association (NLA) the number of landlords in central London reporting a rise in tenant demand has dropped from 45% to 17% compared to January last year.
But figures from the Council of Mortgage Lenders also suggest that the reduction in demand among tenants is down to increased number of first time buyers in the market, something that Prime Minister Theresa May put at the heart of her vision for Britain when she came to power last year.
The CML’s latest figures show first time buyer mortgage borrowing increased by 9% in November, year-on-year.
But London’s rental market problems, coupled to looming tax increases for landlords, are either driving many investors out of the market, or frightening them off new property purchases. The CML say that landlord borrowing has fallen by 10% year on year.
The NLA says just 5% of London landlords say they plan to buy further properties this year, down from 15% last year, while outside London confidence is much higher.
In the North East, for example, 19% of landlords in the region are planning to buy a further property this year, while in Yorkshire it’s 16%.
“It looks like central London is simply becoming too expensive for most people, regardless of whether you want to buy, invest or rent,” says Carolyn Uphill, Chairman of the NLA.
“For many tenants the practical solution of moving out of the city to more affordable suburbs with good transport links is becoming increasingly appealing.
“In turn, it seems that landlords have been quick to respond, turning their backs on the capital and looking to other areas where the upfront cost of acquiring property is lower, and the potential yields to be had are higher”.