Possibly it’s true to say London is the trickiest place in the UK to find the best places to let buy. Property investment London, for property prices, is the most expensive portion of the world. It’s not only one property market but a lot of real estate markets. And in order to establish several diverse sub-markets, such markets overlap. London areas you might think are the best places to buy, such as near well-known sights or in the leafy suburbs, are also not the best places to buy, they can be the worst. So, which areas in London give strong rental yields?
The rental market
Points that you should bear in mind about the London property market: First, investing in London is costly. London has the highest property prices in the United Kingdom so why invest? Rental demand is high in most places, so you can never be short of tenants. London property also has a strong record of rising year after year in value, with which the country’s cheaper areas do not compete.
The closer you are to the centre, rentals appear to be the biggest, but so are the rates. It ensures that yields are typically tighter. When you drive farther away, rates are lower but rentals are not necessarily proportionately lower. Yields can be much higher as a result.
Transport links will significantly impact prices and rents in London. Places that have convenient access to a tube or train station, even though they are farther away than cheaper locations, typically have higher rates and rents. Commuters tend to be 30 minutes away from central London at the latest.
Where are the best rental yields in London?
Central London is home to some of the world’s most luxurious properties. That means yields here are generally poor. Indeed, several central locations in London, yields are considerably smaller than anyone but the biggest corporate investors will consider viable. For e.g. in some streets, Westminster offers 2.1% overall and Mayfair itself offers as little as 1.5%.
Over the past year, however, prices for properties in Central London have dropped. City Of London prices have dropped by 23.8% in the year to July, according to the Land Registry. Yields could theoretically begin to get more attractive here if prices continue to fall. Battersea provides 4%, Brixton 4.3%, Peckham 4.6%, and Bermondsey 4.6%, as is also the case in London locations south of the river.
East London is one of London’s cheapest places to buy and thus usually provides high yields. Inner districts are more expensive but 4.1% can still be given by Canary Wharf and 4% by Poplar. Locations like Ilford (5.5%), Romford (5.5%), Barking and Dagenham (5.5%) have some of the highest yields in London at the moment.
West London, after the immediate centre, continues to be the most expensive area of London for property prices. Ultra-high property prices in desirable places such as Kensington (3%) and Chelsea (3.2%) drive the average figure high, where you can find the most expensive street in London. Areas farther west are less expensive and yields are higher. Examples include Ealing (4%), Brentford (4.3%) and Wembley (4.8%). Yields around Heathrow Airport are high, owing to demand from airport staff. Hounslow, for instance, can return 4.9% and Hayes and Harlington can return 5.1%.
South West London is prime commuter land, driving up rates, so yields can be tight at locations such as Wimbledon (3.8%) and Richmond (3.4%). However, London’s sub-markets, areas a short distance away, including Mitcham’s yields are 4.7% and Wallington’s 4.7%, will deliver better returns for investors. Often agents identify places in South East London as ‘up and coming.’ But that means lower prices and thus yields can be more desirable. Streatham provides 4.2%, Bromley offers 4.2%, Eltham provides 4.5% and Thamesmead will deliver 5.3%.
North London has some of the most coveted suburban suburbs in London. In this situation, property prices may also be directly influenced not only by how far a place is from the City / West End, but also by the travel time for the commuters. Some of the inner areas have become trendy and costly, resulting in tight yields – Islington yields are modest at 3%, as Notting Hill is at 3%. Willesden provides 4.4%, Finchley also provides 4.4% and Burnt Oak (Edgware) yields 4.7%.
Consider the following before you buy a buy-to-let anywhere in London: Take the probable purchase price. Ask many local letting agents for estimates of the probable rent that can be accomplished, and also ask for local guidance about how big the letting demand is. After that, you should measure your own figure for the probable rental yield you can obtain.