London’s house price recovery will start in 2020, predicts the property website Home.co.uk according to recent analysis.
The current slump in the capital’s housing market will come to an end during 2020 due to improving rental yields making property a more attractive option for investors, according to the property website.
This turnaround is likely to start in Newham, where the average rental yield was 4.9 per cent in December 2018 compared to 3.6 per cent in the same month in 2017, according to Home.co.uk.
This 1.3 per cent increase is the largest rise in any London borough apart from the City of London, which saw a 1.5 per cent increase. The average rent in Newham is also £1,671, which is up 7.6 per cent on the previous year.
Hammersmith and Fulham is the next borough that is likely to witness a significant turnaround, according to the recent analysis by Home.co.uk. Rental yields here increased from 3.9 per to 5.1 per in 2018. This takes into account the 6.2 per cent rise in rents in this West London borough between 2017 and 2018.
Hackney and Southwark are other emerging areas for investors to consider, where rental yields grew by 0.7 per cent between 2017 and 2018.
Outside of the city of London, Southwark recorded the biggest uplift in rents of 20.2 per cent over 2018, with the average rent in this borough now at £2,532, according to Home.co.uk. The City of Westminster and Tower Hamlets also witnessed a 0.6 per cent rise in yields over the same period and rents in Westminster rose by 12.1 per cent last year.
Average rents here now stand at £5,505, while rents in Tower Hamlets which rose by 10.1 per cent stand at a current average of £2,350.
The predicted recovery of house prices is set to take longer in outer London boroughs, according to Home.co.uk. In Harrow, Croydon, Waltham Forest, Hounslow, Hillingdon, Richmond upon Thames and Barking and Dagenham; rental yields stayed the same between 2017 and 2018. Enfield saw a fall of 0.2 per cent in rental yields over the same period, according to recent analysis from Home.co.uk.
Doug Shephard, director at Home.co.uk said: “You just can’t ignore the London property market’s remarkable ability to bounce back. History has shown us time and time again how the UK’s leading property market can burst back into growth after a period of correcting prices. The rate of rental yield rises is surely the best analytical tool to pinpoint where the first green shoots will emerge.
“Whilst it is encouraging that 32 out of 33 London boroughs are showing increased yield year on year, it is where they are growing most quickly that is of keen interest to investors. When they approach 6% in 16 or more boroughs, demand in the London sales market will reignite.”
Source: https://www.propertynotify.co.uk/news/london-property-market-predicted-to-recover-next-year/
