WHICH AREA OF LONDON HAS THE HIGHEST RENTAL YIELD?

Over the past 5 years, all 32 London boroughs (and particularly those in central London) have experienced substantial property price growth, fuelled by a combination of record levels of overseas investment and historically low interest rates.

Whilst it is true that the recent reduction in the availability of interest-only mortgages and increases in stamp duty for the most expensive properties may mean that this trend will not be sustained indefinitely, it is certainly the case that, at the moment at least, central London property prices are at an all-time high.

However, while property prices have increased substantially, rental prices have broadly continued to track earnings growth. As a result, rental prices have not increased at the same rate as property prices and yields have steadily declined in central areas for at least the past five years that we have been tracking them.

Rental yields show substantial local variation

Research by Portico  in conjunction with the National Landlord's Association discovered that the picture is slightly more complicated than at first expected.

Within boroughs, there are certain postcodes that consistently perform substantially better than others. These localised hotspots are necessarily areas which are more attractive to renters than they are to potential purchasers.

Anecdotally, Portico found that ex-local authority properties with good public transport links often fall into this category. However, even more interesting are the subtle differences between postcodes and even streets.

Here is a unique street level view of yields that updates with live data, to help landlords with their search for further investments.