Income growth is falling in central London residential property but capital growth is keeping up, concludes FPDSavills research. Rental value falls of 2.8% over the past year have led to net yields to June 1999 falling by 0.7% to 4.5% (see chart) – below the 5.2% yield on medium-dated bonds. The firm also predicts that income returns will remain weak in the short term as demand fails to keep up with the steadily rising supply of property available to rent. FPDSavills also estimates total returns for central London residential property at 20% for the year. Capital values have shot up by 9.1% for the six months to June 1999. Good capital growth is predicted for the short term.
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Income yields: central London residential property |
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Capital values have grown by 9.1% in the first six months of 1999 |
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Source: FPDSavills |
