This time last year the UK was in the midst of its third national lockdown. The vaccination rollout was in its infancy and households across the nation were in peak sourdough bread production mode. Demand had plummeted in the rental market and due to a surplus of stock, rents had fallen to levels last seen in 2013. Many assumed that investing in the London lettings market as a private landlord was a foolish decision.

Ten years ago, there was similarly subdued sentiment. While the circumstances were different, with the world emerging from the Global Financial Crisis, there was much caution and uncertainty around investing in the London property market. However, those who did commit haven’t regretted it. Why? London’s desirability has never gone away. It is a world class city and has continued to be an attractive place to live due to its best-in-class facilities, culture, entertainment and as a global finance and job market hub.

These periods of disruption have demonstrated the resilience of London’s rental market. In the last 18 months we have seen more extremes in supply and demand than in the preceding ten years, even when compared to the Global Financial Crisis. Within this market ‘swingometer’ there have been rental lows averaging £400 per week and we are now seeing highs averaging over £500 per week. If the market can not only survive but begin to thrive again after a period of such intense dislocation, then surely we should feel confident about its prospects?

During times of change it is common for people to be hesitant when making investment decisions. However, our historical data shows that times like these present a fantastic opportunity to generate meaningful returns. Ten years ago investors found attractive yields in Hackney and Stoke Newington and have since seen rents and sales price growth exceed London averages. Today, we see parallels with Croydon and Barking, which offer a lower entry-point investment and enjoy above-average gross yields.

Given that the private rented sector currently provides homes for 27% of Londoners, and has the potential to increase to 40% by 2030, there is a clear growth opportunity for those looking to start out as a landlord or to expand an existing portfolio. But it is not a market for those looking to make a quick buck or cut corners. Those landlords who are willing to invest in their asset, take steps to mitigate risk and adopt a professional approach to compliance and tenant management, have the potential to make very healthy returns over the medium to long term.

Some might say being a landlord is a dying art. We think it’s a smart time for landlords to get into, or expand their presence in, the London rental market. The market survived the most extreme event we could have possibly predicted and Britain’s love affair with property has never gone away, it’s just a longer-term relationship now.

Ed Phillips is Foxtons chief sales officer – Lettings. 

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