Investment from Overseas Boosts Prime Rental Sector in London

In recent years, overseas investment has started playing a large role in the new build market in London and now it looks like this is set to have a positive effect on the capital’s rental market.

Foreign investors from areas such as Asia who have bought property in the city are now looking to rent out these homes to earn a good return on their investment.

There is certainly no shortage of demand for prime rental property in London at the moment so these investors should not have a problem finding tenants for their properties.

A London Development Report by Knight Frank states that demand for property in the capital far outstrips the number of properties available, especially with so many first-time buyers finding it is taking longer to get on the property ladder.

The recent census demonstrated how much the private rental sector has grown in London over the past two decades. There were 372,000 privately rented homes in the inner London boroughs in 2011, almost 190,000 more than there had been in 1991.

Central London also saw a large increase over that time, with the number of rented homes rising by 50% to more than 100,000.

This may sounds like a lot of properties, but there are still several tenants chasing every property that becomes available and that has caused the average rents to rise in recent years. Knight Frank say this, along with good capital growth, has led to excellent returns for those who invested in London property. Now foreign investors are looking to make the same kinds of returns on their investments.

As well as suggesting that demand in the private rented sector will rise in coming years, Knight Frank’s report also predicts that the price of prime property in central London will leap by 17% before the end of 2017.