London investors could see a better long-term capital investment with good yields being achieved and the prospects of increased capital growth, according to Hamptons International.

Mortgage companies are still competing for market share, offering competitive rates for fixes term mortgages. The deals are encouraging investors to commit to long term investments.

There has been a decline in the number of investment landlords opting to sell, as many landlords are re-mortgaging at lower rates and are achieving a better yield. Landlords are currently looking at their current packages and are discussing whether they can be improved upon, and for landlords in mid tenancies it is an ideal time to re-negotiate, said the firm.

The general industry perception is that the market is going to return to a buoyant lettings market. Hamptons recommend landlords take a balanced view of the future.

Confidence at the top

Demand for the high-end properties continues, say Hamptons, an indication of strong confidence in the London lettings market.

Joe Brooks, Senior Manager for Central London said: "There is a definite confidence returning to most aspects of the lettings market. Of note, the Hamptons lettings office in Knightsbridge secured a £6750 per week let in Cornwall Gardens. Many London offices have also received enquiries for top end properties between £2000-£5000 per week."

"June was another successful month with proceedable tenants securing lettings properties. Our stock levels throughout the London and Country offices remained two thirds lower than June 2004, however by comparison, last year’s lettings market suffered from an oversupply of properties with a considerable lack of demand. We expect stock levels to increase within the forthcoming month as we are now moving into a traditionally busy time of the year with landlords eager to get their properties on in time to capture the July to September market."

"Additionally, the number of agreed offers which subsequently fell through is at half the level for June 04 in London, and two thirds in the country. By comparison, Many prospective tenants last year were making multiple offers and were quite prepared to take a risk on a number of properties. Now, there are fewer multiple offers being made, as tenants are in a less favourable negotiating position. They have to commit quickly in order to get their ideal property."

Dayle Hodgson, Senior Manager for Central and South London added, "Whilst applicants are viewing fewer properties than last year, the standard of stock is getting better and landlords are now spending in order to achieve stronger rental levels. Landlords are more willing to implement changes in line with our advice on presentation for marketing. "Void periods have become shorter as properties are letting more quickly."