NLA: rental demand in London 'has nosedived'

The National Landlords Association’s (NLA) Quarterly Landlord Panel for Q4 2016, which had 900 respondents, showed that tenant demand in the capital had dropped and landlords are now looking to higher yielding investments in other areas of the UK.

Landlords reporting a rise in tenant demand over the past quarter have slipped almost 30% when compared with the same point last year – down to 17% from 45%. The NLA described the drop as a “nosedive”.

Separately, the findings show that 40% of landlords in the South East reported a rise in tenant demand over the past quarter – the highest reported across the UK – indicating that tenants are increasingly looking to move out of central London to more affordable suburbs.

The perceived drop in rental demand in central London coincides with a more conservative approach from landlords to purchasing property in the capital in the coming months, the NLA research showed.

Five per cent of landlords who operate in London say they plan to purchase more properties in the next quarter, the lowest across all regions and down from 15% this time last year.

In contrast, the proportion of landlords operating in the North East who plan to buy in the next three months has almost doubled – up from 10% this time last year to 19%. The proportion of landlords in Yorkshire looking to buy has also jumped significantly from 10% this time last year to 16% this quarter.

Carolyn Uphill, chair of the NLA, said: “It looks like central London is simply becoming too expensive for most people, regardless of whether you want to buy, invest or rent.

“For many tenants the practical solution of moving out of the city to more affordable suburbs with good transport links is becoming increasingly appealing.

“In turn, it seems that landlords have been quick to respond, turning their backs on the capital and looking to other areas where the upfront cost of acquiring property is lower, and the potential yields to be had are higher.”