Challenges in the buy-to-let market continue
■ Over 2016, prime rents across London fell by -5.1%, with rents in the commuter zone falling by -0.9%.
■ In the prime London rental market, new build completions, buy-to-let investors and accidental landlords have created an unprecedented amount of stock. As such, tenants can afford to be picky and prices have fallen.
■ Weaker demand from corporate tenants in the London commuter zone has resulted in price falls for larger properties. But continued demand from young professionals means smaller properties are expected to remain popular.
■ For the mainstream market, successive tax changes, as well as mortgage regulation yet to come, is expected to mean a fall in buy-to-let activity for mortgaged investors. Those who continue to invest will be looking for lower value, higher yielding markets.
■ Cash buyers will not be affected by this mortgage regulation but their ability to expand their portfolios may be constrained. As such, this may limit stock coming to the market and put upward pressure on rents.
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