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The best London property investments for buy to let have been revealed in the 2018 lettings report from Foxtons.
According to the London lettings agent, the best London property investments over the past year have been three-bedroom apartments, which have seen the biggest year-on-year increase in average weekly rent, growing by 3.9 per cent to reach £658 per week in 2018.
This was followed by one-bedroom flats, up by 2.2 per cent to an average of £366 per week. Two-bedroom flats and studios saw rents rise by 1.6 per cent and 1.5 per cent respectively to averages of £461 and £289 per week.
However, when seeking the best London property investments, it is also preferable to avoid ground floor flats.
According to Foxtons, buy to let landlords renting out standard ground-floor flats are suffering losses, with the ‘rental premium’ – the buying price per square foot compared with the rent per square foot – commanded by such properties down at -9.4 per cent. In contrast, the premium for ‘raised ground floor’ flats (properties above street level, often accessed by a flight of steps) is 6.2 per cent, and a premium of 4.7 per cent was seen for ‘lower ground’ (i.e. basement) flats.
When it comes to location, London property investments in Zone 1 saw the strongest growth in annual rent, though Zone 2 was the most popular with renters.
Zone 1 saw the average rent grow by 3.9 per cent year-on-year to hit £554 in 2018. In Zone 2 rents average £459 per week – an increase of 1.7 per cent – and in Zones 3-6 it’s £394 (2.2 per cent).
Zone 2 properties attracted the most interest from renters, with 41 per cent of the prospective tenants registering with Foxtons in 2018 requesting a Zone 2 location.
By comparison, 29 per cent of tenant registrations were for Zone 1 properties and 30 per cent were for Zones 3 to 6.