London’s buy to let landlords are charging tenants double the average national rent, according to BM Solutions, one of the UK’s largest buy-to-let lenders.
The firm, which is part of Lloyds Banking Group, said average rents in London reached £1,417 a month in the last six months of 2013. That compares to average national rents of £701.
Tenants in the capital are paying 10.5% more year-on-year, equating to £135 of additional monthly rent; bigger than the previous year-on-year rise.
UK-wide, rents increased 4% per month, or £27.
BM Solutions stated that while rental income has risen, house prices have also increased, resulting in an overall drop in property yields.
In the last six months of 2012, an investor could expect to make 5.6 per cent per year, dropping marginally to 5.5 per cent in the same period of 2013.
Nationally, there were big disparities in the deposit amounts being laid down by property buyers. In the north of England deposits averaged £27,710, while for London buyers this figure shot up to £119,750.
There was a substantial 28% increase in buy-to-let purchases in the last six months of 2013, amounting to 46,430 acquisitions. This is twice as much as 2010, but a long way from the heady days of the Q3-Q4 peak of 2006, when 96,640 buy-to-let properties were bought.
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