London continues to lead the way for Private Rented Sector investment appetite, capital value outlook and future income expectation, the latest Yong Index reveals.
Almost half - 46% - of Private Rented Sector (PRS) investors are considering purchasing additional homes in London over the coming 12 months, in order to take advantage of rising rents and potential future capital appreciation.
Investment appetite throughout the UK strengthened during Q1 2012, but London assets clearly remain more appealing to investors than those outside the capital.
Among those not actively considering investing in the London market, the reasons given were overwhelmingly finance-related, rather than reflecting a lack of confidence in the market. This was not the case when investors were asked about investing in additional property assets outside of the capital, when concerns over future tenant demand and capital value prospects topped investors' concerns.
A staggering 85.4% of property investors predict that property prices will rise in the capital in the short term, compared to 41.2% for property outside London.
Property values in London are expected to increase by an average of 2.2% between now and Q1 2013, whereas investors predict that values across the rest of the UK will fall by 0.4% over the same period.
Following a dip last quarter, the number of investors predicting rent rises in London has increased once more. 92% of investors expect London rents to rise over the coming 12 months, by an average of 3.25%.
Neil Young, CEO of Young Group and Young London comments: "Investors appear more committed to the Private Rented Sector than ever; a full 100% of respondents indicated that they have no intention of liquidating PRS assets over the coming 12 months. 30% of investors are intending to hold their properties for at least the next 20 years and 62.5% for at least the next 10 years. The average anticipated future hold period increased in Q1 2012 to 15.7 years, an increase from 13.2 years at this point in 2011.
"There is clearly a long term commitment to the PRS. Confidence in the asset class remains strong, particularly for property in the capital where investors see future tenant demand is seen as virtually guaranteed."