Annual rental value growth in prime central London is slowing, whilst continued economic investment helps accelerate performance in the north-west city.
- Annual residential rental value growth for properties in prime central London locations is slowing, as the local lettings market is currently experiencing a period of adjustment
- Growth for June stood at just 3.4%
- Manchester was recently named as the UK’s buy-to-let hotspot, with Northern Powerhouse plans placing emphasis on high-end property for growing executive tenant numbers
Should investors looking to secure a high-end UK property look away from London for the best returns?
New research from Knight Frank has found that annual residential value growth for high-end property in prime central London locations slowed down to just 3.4% in June. Although this represents the twelfth consecutive month of annual growth, demand for rental property has been inconsistent, as the prime central London lettings market goes through a period of adjustment.
Key to the slowdown has been high stock levels in some areas, slowing the rate of rental growth.
Tom Bill, Head of London Residential Research at Knight Frank, said: “One example is high stock levels in some areas, the result of landlords having waited for clarity around the result of the (General Election) vote before deciding whether to let their properties.”
Comparatively, HSBC recently pinpointed Manchester as the UK’s buy-to-let hotspot, with average rental yields of 7.6% and the possibility for a much higher rate of growth.
The city has one of the lowest levels of new housing stocks and a population that has grown at three times the national average in recent years which demands quality rental accommodation.
Manchester is also set to benefit from £7 billion worth of investment under Northern Powerhouse proposals. This will drive the need for luxury rental property for the growing number of travelling business executives staying in the city for short periods.