The property market in London has been changing gradually since the beginning of the 1990s, according to the Resolution Foundation. Before then, the number of people who paid a mortgage to own their home was higher than the amount of people renting privately. This has fallen at the same time as the volume of private renters has increased. That number is now creeping closer to 40%. PricewaterhouseCoopers claim that in less than a decade it is expected to rise to 60%, making private rental the majority option.

The continuation of the trend offers excellent benefits for investors because it means demand for rental homes will remain strong. Higher property prices in London coupled with living costs makes it tricky for many people to purchase their own homes. As a result there is a high demand for properties for rent and great opportunities to make profits in the long term.

There are worries that the introduction of a new surcharge on top of stamp duty for buying buy to let homes will deter people from deciding to become landlords or expand their holdings. It will cause higher costs, but the expected continued rises in demand can offset this. Investing in property gives you the opportunity to achieve a rental income while still holding on to a valuable asset.

The real impact of the surcharge is that investors will need to look more carefully at the properties they buy and the areas they target. To stand the best chance of making healthy returns, they need to put their money where demand for properties is high and rental rates are healthy. This means more preparation is needed and they’ll need to look closer at markets to make sure they buy the type of properties renters are looking for.

At Finefair we are a leading lettings agent covering the Havering area as well as all other parts of the capital, and we work with landlords to help them obtain the very best returns from their assets. We provide a range of services, offering advice about searching for properties and identifying which qualities renters in specific areas are likely to be looking for.