Investors prefer to invest in property outside of Central London

The decrease of yield and lack of supply in the residential property market in London has led to the fact that institutional investors began to leave the real estate market of Central London. These are the latest figures presented IPDUK– annual index of property prices in the UK.

UK net income investors in residential property in the UK in 2014 was 13.5%. The strongest yield growth showed areas located outside of Central London.

Yield investors, which is considered as the sum of capital growth and rental yield in Central London fell by 1.8%.

Different areas of London showed different yield. Property in London in certain areas has yield reached 24.4 percent in 2014, and the rental yield was only 3.1% , the other districts showed a total return of 21,1%, while only increasing the rental yield amounted to 3%. We can say that Prime Central London showed a very modest profitability in 2014, 9.8% , falling from a level of 14.7% in 2013, while rents increased in the area by 4.8% for 2014.

Outside of London the property is in the South-West and Central part of England showed the best results – the total return was 9.7% in these regions. Significant improvement shown by the real estate of Scotland and Northern Ireland. For the first time since 2007 in 2014 was shown to yield at 3.5%.

Excellent performance from commercial property, which showed 17.8% of the total yield.

Amid falling yield in the elite areas of London, the interests of investors focus on the construction outside London, in areas with high levels of employment and high demand from potential buyers.

® Maximlevitsky. 03.03.2015 G.

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