The London housing market is one of the most exciting – and sought-after – in the world. The English capital is a thriving metropolis with a vast rental market.
PwC figures project that 60% of Londoners will rent their homes by 2025. Meanwhile, data from the Office for National Statistics show that London’s population is on track to increase by 12.7%, reaching 9.8 million people by 2025. That provides landlords with a potential rental market of 5.88 million tenants.
Buy-to-let investors have an incredible range of choice and long-term forecasts from Savills project price rises of between 15% and 21% by the end of 2021. This indicates excellent potential for capital growth from buy-to-let property in London.
Like many UK cities, London is in the midst of a housing crisis. Decades of undersupply have led to consensus that the capital requires 50,000 new homes per year to meet demand, yet barely half of this number are currently being built each year.
Rents in London have spiralled upward in recent years. From April 2011 onward, they have outstripped average weekly earnings at a rapid pace (largely due to stagnant average weekly earnings). According to Savills, the situation will get worse over the next five years – it expects rents nationally to rise by 19% by 2021 (faster than the projected house price rise of 13%). For buy-to-let investors in the capital, this is promising news indeed.