London buy-to-let returns reach 16.1%

In the capital income returns stood at 2.63% while capital returns reached 13.8%.

London buy-to-let returns stood at 16.1% in the year to February 2016 due to rising property prices, the Property Partner Residential Market Index has found.

In the capital income returns stood at 2.63% while capital returns reached 13.8%.

For the UK as a whole returns reached 8.9% despite capital returns turning negative at -3.81% in the North East.

Rob Weaver, Property Partner’s director of investment, said: “Bricks and mortar continue to outperform stocks and shares which are far more volatile.

“London is still proving a beacon of strong performance with buy-to-let returns making landlords a healthy 16.1% year-on-year, mainly due to average house prices marching ever upwards.

“But the regional divide is widening. Our research shows the North East to be out of kilter with the rest of the country, looking particularly weak and plunging into negative territory once again – the fifth time in 12 months.

“By contrast, the North West of England saw strong growth, posting the best monthly return of any region. However, the story ahead for traditional buy-to-let landlords, could make uncomfortable reading when mortgage interest tax relief is gradually withdrawn and interest rates finally increase.”