London postcodes with the best rental yields for buy-to-let investors
Jan 24, 2024
If you’re in the market for a London buy-to-let investment, you’ll need to identify the areas that promise the best rental yields. With the Capital’s soaring property prices and fluctuating market trends, making a savvy investment requires insight and data-driven analysis.
EVALUATING POTENTIAL
London’s property market has undergone an unparalleled surge in the past decade, with the UK House Price Index showcasing an increase in average house prices from £311,364 to £535,789 (January 2013 to January 2023). While indicative of a thriving market, this trend is a hurdle to buy-to-let mortgages, where hefty deposits can be too much of a stretch.
DATA-DRIVEN INSIGHT
Uncovering the prime areas for profitable buy-to-let investments requires a meticulous and data-driven strategy. Benham & Reeves has differentiated each London postcode district based on two metrics: rental yield and five-year price growth.
WEST LONDON’S TOP POSTCODE
The top performing West London postcode is W7 – Hanwell. The average asking price is just over £544,100 and the average monthly rental is £2,218. This results in an average yield of 4.90% and a five-year growth plan of 16%.
By way of comparison, the leading London postcode is E9, Hackney and Homerton at 5.40% average yield and 20% growth. At the bottom of the table according to the data, is Walworth (SE17) with an average yield of 5.7% and showing a negative outcome over five years of -1%.
Take a closer look at the London leaders and find out why these areas stand out.
