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Booming London property rents continue to attract expat buy to let landlords

Expat buy to let landlords profit from strong UK rental market

A recent report by estate agents Martin and Co, who have 25 offices in the London area, suggests rentals in the capital are continuing to boom, with demand exceeding supply.

The number of tenants registered for each property offered by Martin and Co rose from 7.5 at the start of the year to 11.8, underlining the fact that good quality properties in good locations are likely to see very few void periods.

This high demand for rentals translates into strong support levels for rental incomes, with the London average growing 5.7% to give a range of rental yields from 2.3% to 6.4% on a typical two bedroom flat and an average rental yield across the capital of 4.3%.

Guy Stephenson, a spokesman for expat mortgage brokers said, “Rental yields at this level mean that expat buy to let landlords can potentially see a profit on their rental activity alone, even before any possible growth in house process is factored in, as variable rate expat mortgage are available from 3.53% to 3.69%, depending upon the deposit the expat buy to let landlord is happy to contribute.  Minimum deposits are 25% of the purchase price, but lower expat mortgage rates are available with a 40% deposit.“

Property prices continued to rise in 2015, with the biggest uplift being in London, where values rose by 11.2% over the year to November, according to the latest index produced by the UK Land Registry. Other standout areas included Luton, Reading and Slough, with annul price increases of 14.2%, 16.2% and 13% respectively, according to the same report.

Eleven London boroughs managed double digit house price growth, with the top three being Hillingdon (14.4%), Barking & Dagenham (14.2%) and Newham (13.2%).

Despite recent changes in the tax treatment of expat buy to let portfolios introduced in April 2015, Offshoreonline is continuing to report strong interest in expat mortgages, with a shortage of international mortgage lenders the main difficulty being faced by the market.

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