Key areas of London are now seeing the price of one-bedroom apartments rise, and it's largely down to the fact that demand for this type of property from tenants is on the increase, new reports are claiming.
Bi-annual research from property advisors and development consultants Hurford Salvi Carr has shown that in the past 11 months, since the start of 2014, the price of one-bedroom flats in Midtown, City and Docklands has risen by seven per cent.
This is particularly impressive when compared to the rate of increase seen in these areas in general. Larger apartments have seen their prices growing by just two per cent across the same time period. The majority of this demand has come from landlords as an increasing number of buy-to-let investors look to get themselves in on the property market when demand is high.
According to the report, Midtown, City and Docklands has seen a rising number of both tenants registering and taking on new leases, particularly in the second half of the year. In the year to date, rent levels are about the same as they were at the end of 2013, but this is largely to do with the fact that the second half of the year has seen a rise following a poor start to 2014.
At the moment, the yield for one-bedroom apartments also remains reasonably strong, with the report stating that the average the moment is still hovering around the four per cent mark, which would also explain why so many investors are now looking to put their money into this area, pushing prices higher than for other apartment types.
Looking forward, the outlook for properties in the key London areas is also strong for landlords. The report states that in the next 12 months, investors can expect to see the average residential rental rate rising by five per cent.