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Buy-To-Let Is Back- The Evening Standard October 05

NOW IS THE TIME TO INVEST IN THE CAPITAL Writes David Spittles

While outside the M25 it is a tenant's market, buy-to-let is back on theLondon agenda for property investors who seized the chance to buy keenly priced property.

Analysts predict an upward phase because the Capital's population is rising, employment levels remain high, especially in the buoyant financial services industry, interest rates appear to be on a downward trend and the 2012 Olympics will provide a sustained regeneration boost.

Rents are up by 10.5 per cent, three times the rate of of inflation, according to John Heron of Paragon Mortgages. He adds today's investors are much closer to the ground than they were several years ago.

They study the market to gauge changing demand for rental property. If a Hospital is expanding, or a college opening or a Postcode getting a facelift, they regard this as a buying signal.

Ed Stansfield, of analyst Capital Economics, says Landlords are enjoying the best letting conditions in years, partly because would-be buyers are sitting on the sidelines waiting to see which way prices go.

Paragon reports the average rental return in Greater London is 5.81 per cent, which with the prospect of capital growth, is enough to attract fresh investment buyers into the market. The average price is £290,172.

On the development front, off-plan buying is strengthening after a lull.