Although many reports are pointing the finger at Brexit for causing delays in the property market, London is starting to show some positive signs, becoming a buyers’ market for buy-to-let investors, new data shows.
Ongoing political uncertainty is clearly causing some buyers and sellers to adopt a wait-and-see approach towards property sales. However, with Brexit uncertainty continuing to hit house prices, a growing number of buy-to-let landlords are starting to see it as a good time to purchase.
New figures from specialist buy-to-let broker Commercial Trust Limited reveal that London regained its position as the leading region for buy-to-let business applications during the first quarter (Q1) of the year.
The number of submitted purchase mortgage applications for the capital in the 12 months to April rose by 4% on the previous quarter, to hit 15.8% of overall business. The South East was close behind, at 14.5%.
In Q4 2018, the South East had overtaken London for the first time.
Commercial Trust’s data ties in with a recent report from London estate agent Chestertons, which claimed that London is starting to offer improved rental yields, as the market shows signs of bottoming out.
The East of England and North West also enjoyed an increase in the proportion of buy-to-let applications submitted during Q1, with this type of business accounting for 12.5% of all applications in both regions.
The same two regions shared the top spot for buy-to-let completions over the quarter, with both contributing 13% of overall completions.
In total, remortgage buy-to-let applications continued to dominate in Q1, with 60% of business coming from landlords looking to refinance.
Andrew Turner, the Chief Executive of Commercial Trust, says: “The effects of Brexit have been keenly felt in London, and, perhaps, the stalling of house price growth has to some extent created a buyers’ market for buy-to-let.”
He believes that the firm’s latest figures underline the importance of London and the South East within the buy-to-let sector.
Turner explains: “For Q1 2019, these two regions contributed over 30% of our buy-to-let purchase applications, an increase from the 26% recorded in Q4 2018.
“Whilst it is good news to see increased activity in London, movement is not restricted to that area, and both the North West and East Anglia have also increased their proportion of overall purchase business during the quarter.”
He is positive about the future: “With Brexit now pushed back to later in the year, the combination of low interest rates, a wide variety of mortgage product choice, stalling house prices and soaring tenant demand, many investors are of a mind to invest in the private rental sector.”