Howsy: £1.1m owed per London landlord through BTL borrowing
In inner London, the total amount owed per landlord through buy-to-let (BTL) mortgage borrowing is £1.1m, falling to £811,000 in outer London, according to research by Howsy.
This equates to just 24% of the average BTL portfolio value in both areas, with London landlords owing the smallest proportion of their portfolio value of all areas other than the South East.
At 4.8%, outer London is home to the lowest average yield of all the regions across England, while inner London is the second lowest at 5%.
The average rent earned per month is still by far the highest in inner and outer London, at £2,453 and £1,697 respectively.
The East of England, South East and South West are the only other regions to see average rental income sit above £1,000 a month.
Landlords in inner London have an average portfolio of 7.7 properties, climbing to 7.9 in outer London.
In inner London, the average buy-to-let (BTL) portfolio is worth £4.5m on average, the highest of any region.
In outer London, this drops to an average of £3.3m, but remains considerably higher than any other region.
In the last year, just 28% of landlords in inner London saw their tenants fall into rental arrears, the lowest of all regions.
In outer London, this figure also remains under 40%, but was higher than the East of England, South East and South West.
Over the last three months, however, this figure has fallen to 31% in outer London.
Along with the South West, this is the lowest level of arrears of all regions other than inner London, where just 24% of landlords have experienced arrears.
Callum Brannan, founder and CEO of Howsy, said: “When investing in a buy-to-let there’s a whole host of criteria to consider above and beyond the yield available.
“Demand plays a huge part in the success or failure of your investment and so other criteria such as void periods should be carefully considered.
“It’s all well and good securing a higher yield, but if your property remains empty for a larger proportion of the year this will dent your profitability.
“Tenants can also have an impact while in situ and a tenant that isn’t paying can be tricky and expensive to get rid of while reducing your profit margins at the same time.
“While this is a problem throughout the market, London offers the best chance of a better quality tenant and all things considered, the capital is one of the best segments of the buy-to-let market.”