London still attracts rental investors despite 'disjointed' market

A prominent property expert who runs a buying and property management service for high end clients says London still attracts international interest in the rental market.

This is despite national economic issues hitting the UK, along with regulatory and tax challenges for all investors in lettings.

Jo Eccles, who runs the Eccord property consultancy, says notwithstanding these problems, London is seeing new interest in lettings.

She says she is working with an American family office which already has a large prime residential portfolio in the United States and now wishes to begin building a London portfolio of similar size and stature. 

And she says: “For investors who are willing to take a long-term view, London’s reputation as a global safe haven with rigorous financial and legal systems, ensures it continues to compete as a destination of choice for global HNWI and UHNWI.”

Eccles says the supply of rental properties – particularly in the core flat market – is rising steadily due to a relatively subdued sales market, where low transaction volumes and underwhelming sales prices are leading more sellers to explore the rental market as ‘unintended landlords’. 

But she admits that landlords are facing what she calls “a disjointed market” with certain properties letting quickly and others gaining little traction. Rents are stable, but landlords are having to be responsive to price changes if needed, to reduce the risk of void periods, she cautions.

“We continue to see a general consolidation of personal affairs across the property sector, with owners keen to sell properties which are surplus to requirements. This simplification of assets is a trend which is also being reported by private banks and across other investment classes. The timely disposal of rental properties is a recurring conversation with our landlords as tenancies conclude and they take the opportunity to test the sales market. However, a lot haven’t achieved the capital growth they were hoping to achieve as many values remain below the 2014 peak, and so are returning to rentals for the time being.”