London letting and estate agents Foxtons are telling landlords what type of property not to buy, even though the advice could knock their sales.
The property business says buy to let landlords should steer clear of ground floor flats.
The firm says landlords letting these flats are suffering losses as the rental premium – a comparison of the buying price a square foot with the rental value a square foot – is running at -9.4%.
This means landlords are paying more for a lesser return compared with other flats.
But flats on the raised ground floor – which are typically accessed up a flight of steps – have a rental premium of 6.2%, while basement flats come in at 4.7%.
What else does the letting agency say that might help landlords?
Well, the upcoming rental hot spots are Hornsey, Hayes and Leyton, but the average house prices for investors are off-putting at £536,718 in Haringey (Hornsey), £407,751 in Hillingdon (Hayes), and £440,455 in Waltham Forest (Leyton).
But the highest rental yields are coming from East London’s borough of Barking and Dagenham – at an average 4.5% and an average property price of £325,048 in 2018.
Newham, Tower Hamlets and Greenwich take the other top places.
Transport for London’s Zone 2 is most popular with buy to let renters, averaging rents of £459 a week, compared with Zone 1’s £554 and £394 for Zones 3 -6.
Foxtons says new tenant registrations in the capital were up 8% last year, but properties available to rent dropped by 11%.
Properties returning the biggest year on year rent increases were three bedroom flats – up 3.9% to £658 a week.
|Flat type||Average weekly rent (2018)||% change year on year|