The first quarterly survey of the buy-to-let market from the Association of Residential Letting Agents (ARLA) found the average rental return on a buy-to-let investment was 6.3% over the summer, down from 6.8% in the previous quarter. Prime Central London returned an average 5.6%, the South East 6.1% and the rest of the country 7.0%.
However, ARLA registered letting agents reported a 15% rise in the number of new tenancies arranged, with average new tenancies up from 19.2 to 22 in the two months before the survey.
Oversupply in Central London remains high, with 84% of agents reporting too many properties. And oversupply was also seen by 63% of agents in the rest of the South East compared with 47% in the rest of the country. Void periods in a full year are reported as averaging 29 days outside prime Central London and 35 days inside.
Malcolm Harrison, spokesman for ARLA, said: ‘The Central London market has had a bad time and elsewhere it has been patchy but fine.’