City revival brings buy-to-let fillip

LONDON'S ailing buy-to-let market is on the road back to health thanks to a wave of corporate tenants and Americans moving back into town because of the recovery in the City.

After a year of dismal returns, buy-to-let investors are cautiously optimistic that 2004 will be more lucrative.

New lettings from corporate tenants have surged from 13% to 25% over the past year, while American tenancies have risen from 18% to 28% in the past six months.

Fiona Sadek, head of residential research for Knight Frank, which published the findings, said: 'We are seeing a recovery in the corporate rental market, linked to the pick-up in the stock market.'

Knight Frank forecast rent levels will rise 2% this year, after falling 10.4% in 2002 and 3.9% in 2003.