Although landlords with properties in London are enjoying substantial capital appreciation their rental yields, even in prime areas, remain relatively low according to Knight Frank.
Its latest survey of the capital's prime markets shows that rental yields were 2.84 per cent in the year to the end of February in prime central London, and were 3.67 per cent in prime outer London. However, when you add in capital value growth the total returns over the same period were 10.6 per cent in prime central London and 15.1 per cent in prime outer London.
The agency says it's buoyed by the increasing prevalence of relocation agents which many companies use to move staff overseas. Enquiries from these agents to Knight Frank more than doubled over the winter and are not at their highest-ever total.
Similarly, Knight Frank says lettings volumes in prime central and outer London are up 20 per cent over the past year generally, while viewings and applicants are up about 10 per cent and seven per cent respectively. The rises coincide with data collected by the agency from recruitment consultancy Astbury Marsden which shows London's financial services sector created 25 per cent more jobs in February this year than the same month in 2013 - confirmation of the close link between the capital's high-end lettings sector and the City.
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