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A new survey from Paragon revealed that properties in central London are more likely to have reduced rents than other areas in England in the last 12 months,
Data obtained in a study of 1,043 buy to let investors across England found that those in central London were not optimistic about the prospects of the sector. Fewer landlords in the capital reported tenant demand to be stable or increasing than any other region. Over a quarter of those were likely to have reduced rents in the last year in a bid to limit void periods and entice new tenants in an increasingly competitive market.
Relative growth in supply in the capital, coupled with a slump in demand has led to the London rental market becoming sluggish. Furthermore, landlords are increasingly burdened with regulatory pressures, adding increasing stress to their outlook and limiting optimisim.
However, the Paragon study also found that overall landlord confidence had remained solid or increased during the first quarter of 2018 in comparison to the end of last year.
Landlords who reside in the east of England were most positive about the future, according to Paragon’s report. Over half, or 53 per cent, felt upbeat about the prospects for their own lettings business over the next three months.
In stark contrast, landlords in central London were the least optimistic. A mere 26 per cent of London landlords rated prospects for their own business as good or very good over the next three months.
Managing director of mortgages at Paragon, John Heron, commented on the data: ‘After an unprecedented level of change, it’s encouraging to see landlord confidence stabilising this quarter. At a regional level, the East of England and the Midlands look well supported, with encouraging data on tenant demand, yield and capital gains while the London market adjusts its footing after many years of strong growth.’