Buy to let income for landlords living in London reached £7 billion in the last tax year, according to estate agent ludlowthompson. This accounts for some 20% of the total for all landlords living across the UK.
Private landlords residing in the capital saw £7 billion in total revenue from their residential property investments in the year to April 5 2018, up by 6.4% from the previous year.
This compares to a UK-wide average of 4.8% growth, up to £34.8 billion in 2017/18 from £33.4 billion in 2016/17.
Buy-to-let is still viewed as a lucrative and relatively low-risk investment opportunity, despite the increasing amount of regulation that has been placed upon the industry. Typically, property performs better over a longer period – in terms of consistent returns – than other asset classes such as stocks, shares, government bonds and cash ISAs.
Although the government has introduced changes to available mortgage interest tax relief, ludlowthompson believes buy-to-let landlords are still set to benefit from around £16.7 billion in relief even once the changes are fully phased in by 2020.
In London, in particular, the figures are a cause for optimism. Overall, private landlords in the capital made on average £20,000 in property income in the last year, compared to £14,000 for landlords UK-wide.
Meanwhile, 16 of the top 20 UK hotspots for private landlords with the highest average amount of annual property income per capita were in London, with landlords living in Kensington and Chelsea, Westminster, the City of London, Camden, Barnet, Hackney and Epping Forest generating the highest levels of average property income.
“Landlords, living in London and across the UK, can be sure their buy-to-let properties remain a sensible, long-term investment,” Stephen Ludlow, chairman at ludlowthompson, said.
“Whilst house prices are not a one-way bet, they have been far less volatile than other asset classes like shares.”
He added: “When you see the share price of one of the UK’s biggest banks fall 9% in a day, based on no corporate news at all, you can see why investors prefer the relative stability of residential property.”
Ludlow said the benefits of buy-to-let also extend beyond landlords, with the private rental sector playing a vital role in ensuring there is a healthy supply of high-quality rental accommodation that enables labour mobility.
“Renting is, in fact, part of the solution to the housing crisis,” he said.