According to a recently published survey by UK estate agents Find UK Property, Investors are rapidly losing faith in London’s real estate market, with rental yield now being seen as significantly more important that getting a property in and around the nation’s capital city.
Purchasing a property within London is now much less important for investors than reaching target rental yields and guarantees, the survey explained.
Overseas buyers’ agent Find UK Property requested clients to rate 13 factors when considering purchasing property in the UK. Each factor was judged on a scale of 1 to 5, with 1 being the least important and 5 being essential.
Rental yield and rental guarantee came took the first two places in the poll in that order, with an average score of 4.45 and 4.42 respectively. Close behind was being able to view the property personally (4.41), slightly ahead of a property being the best possible price (4.38).
What is most surprising about the survey is that “Getting the property near London” was rated as the least important factor, with an average rating of 1.84 on the scale. This is hugely contrasting with the results of last years survey, when 60 per cent of respondents stated that they wished to purchase within London and the South East.
Andy Noble, Senior Marketing Consultant at Find UK Property, says that high prices and low rental yields could be one explanation for the counter-intuitive outcome of the survey.
“London Property Prices are now very high, whereas rents in the capital have not risen significantly. The rental yields have thus decreased and are now around 3 per cent, compared with 8 per cent in some other areas of the country.”
The prospect of a possible cool-down in London prices over the next 12 months lowers the appeal of the capital even further, and the results of next years survey are projected to see ‘proximity to London’ garner an even lower score.
The opinion of clients changes during the buying process, Tariq Mohammed, who conducts the evaluation of the survey for Find UK Property, told property news website OPP Connect. “Most of the clients start looking for a property close to London, but when they learn about the high prices in London and the low rental yields, they begin to look at areas outside the capital.”
Mr Mohammed also explained that it’s clients have practically been priced out of the London market. “The majority of the clients taking part in the survey cannot afford properties in London, so the criteria falls off the list”. He also thinks that for their more affluent clients, proximity to London is still a very important factor.
The estate agent said that more and more British expats are also discovering investment opportunities available to them in their own country. Whilst they are working abroad they are able to rent out their UK properties, which they feel offers better security and safety than properties abroad. The chance to use the home themselves was rated with a score of 3.01 on the scale, suggesting that many overseas buyers are looking for a purely investment based opportunity in the UK.
Author Bio: Bradley Shore is an experienced property investment author. He writes most of his articles on the current UK property market. Bringing you the latest news and trends. He is very passionate about his work as you can see in his recent stuff for Innovo Property.