Yields on central London residential property have started to climb for the first time in 18 months, according to research by FPD Savills.
A report by the company says that yields had levelled off but are starting to rise again because of the increase in the supply of property to buy over the past few months, which has created a buyers’ market.
The average net yield from prime central London property stands at 3.8%, and is likely to reach 4% by the fourth quarter as rental prices climb, Savills predicts.
FPDSavills’ head of residential research, Richard Donnell, said: “The rental market is in the early stages of an upturn.
“Yields are now recovering from their all-time lows and look set to rise further as the rental recovery picks up speed.”
The current gross yield as a percentage of capital value from prime central London property is 6.5%.
Savills predicts a 5% rise in rental values this year.
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Central London residential property yields |
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After levelling off, yields are rising because of an increase in supply |
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Source: FPDSavills |
