High property prices cause investors to abandon London

Rapidly rising property prices in London have brought about a significant fall in investors buying property there, according to research from Landlord Mortgages.

The city has the highest average buy-to-let property price of all the UK regions (£223,997) and the 2004/05 figures shows that only 8.56 per cent of all UK rental properties bought were in London.

This result is a five per cent fall on last year and has resulted in the capital becoming only the sixth highest UK region for purchasing buy-to-let properties.

Lee Grandin, managing director of Landlord Mortgages, said: "Despite the fact that London has traditionally had a strong buy-to-let market, over the last few years investors have started looking elsewhere.

"The capital is simply too expensive to provide the type of yields and potential capital appreciation that investors are looking for."

The best results belonged to the south-east (22.54 per cent) and the north-west (13.41 per cent) whereas Wales (3.42 per cent) and Scotland (2.71 per cent) had the lowest results.