The increasing numbers of people turning to buy-to-let as a form of investment is likely to be a factor in the upturn in property prices in the capital seen since August, according to experts.
Although property prices in London slowed in the months following the peak of August 2014, they rose to an average of £510,000 in January, only £4,000 off their peak level and a rise of 1.6% on the average price of £502,000 seen in December; the figures also mean that there has been a 12.8% rise in the past 12 months.
And, according to surveyors E.Surv, the high numbers of people using buy-to-let conveyancing in London is likely to be one of the key factors behind the rise. “So-called ‘Granlords’ withdrawing their annuities to fund buy-to-let investments are another party competing for the same stock of housing,” said a spokesperson with the group.
“Potential buyers are coming in from all directions to buy into a constricted supply of property on the market, and time is ticking to build more homes,” he added.
However, a recent report by property investment specialist Emerging Property has found many British investors to be wary of the buy-to-let property market. According to a survey by the company, 36% say that they are deterred by the risks of the buying-to-let market, with 63% put off by the risk of damage and 62% concerned that they might lose out on rent as a result of a property being unoccupied.
James Harrington, business development manager at Emerging Property, said that investing in student accommodation could be “key” to mitigating “concerns expressed by investors”.
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