The housing market may be flattening out, the latest London residential development review from Knight Frank suggests.
It shows the price of some properties has declined as much as 40 per cent, with yields in excess of ten per cent possible.
Jon Neale, head of development research at Knight Frank, comments: "It is beginning to make more sense to invest in housing for the rental returns alone, particularly as so many other investments are performing so poorly."
He adds that there is an increasing interest from investors in London, who are looking at smaller properties such as one and two-bedroom flats.
There is also a surge in people looking at buying land in the capital as well, Mr Neal adds.
Recent figures from the Halifax house price index show the cost of the average house fell by 2.3 per cent last month, with activity levels falling to their lowest in six years.
Click here to view the Knight Frank Prime Central London Index.
See Also: Property News (6705)
Date Published: 05 March 2009
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