Brexit has helped create ‘a buyers' market for buy-to-let’ in London

The buy-to-let market is starting to show some positive signs, especially in London where activity is picking up again, new figures show.

The ongoing political uncertainty is clearly causing some buyers and sellers to take a wait-and-see approach when it comes to the housing market, but 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 buy property.

New data from specialist buy-to-let broker Commercial Trust Limited shows that London regained its position as the leading region for buy-to-let business applications during the first quarter 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, closely followed by the South East on 14.5%.

In Q4 of 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 Chesterton’s, who recently reported that London is starting to offer ‘improved yields’ as the market shows signs of bottoming out.

The East of England and the North West also enjoyed an increase in the proportion of buy-to-let applications submitted during Q1, with both accounting for 12.5% of this type of business.

The same two regions shared top billing for buy-to-let completions over the quarter, with each contributing 13% of overall completions.

Overall, remortgage buy-to-let applications continued to dominate in Q1, with 60% of business coming from landlords looking to refinance their mortgages.

Andrew Turner, chief executive at Commercial Trust, said: “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.”

Commercial Trust’s latest figures underline the importance of London and the South East within the buy-to-let market, according to Turner.

He continued: “For the first quarter of 2019, these two regions contributed over 30% of our buy to let purchase applications, an increase from the 26% recorded in Q4 of 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.

“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.”

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